If you’ve stayed on top of the news over recent weeks, you’ll have heard everything there is to know about inflation. Put simply, it’s going through the roof, and suggests that a huge financial crisis is looming.
Based on the above, one might believe that now is most definitely not the time to take a risk and start your new business. However, play your cards right, and it can work out to be a golden option.
Through today’s article, we’ll take a look at four of the most impactful tips that you can adopt when it comes to starting your new company when inflation is soaring.
Prioritise high profitability products and services
In some sectors, this just isn’t going to work. However, if you do have a selection of products or services which do have higher profit margins – try and prioritise them. This will allow you to build a larger margin for error into your business. After all, if your costs do start to rise, you at least have healthy profit margins able to soak up some of the pressure.
Businesses that operate on lower margins will end up passing additional costs onto their customers and suffice to say, this doesn’t always end well.
Keep a close eye on your costs
As we just discussed, one of the issues businesses will face during periods of high inflation is rising costs. As a result, it’s important that you keep a very close eye on all of your expenditure items, whether it’s the “fashionable” costs such as sourcing products, or the “hidden” ones such as your public liability insurance obligations.
You might find that some of your costs have risen without you even realising it. If this is the case, you need to be quick to react and either find a cheaper alternative or pass the cost onto your customers. As we’ve already mentioned, the latter is hardly desirable and the results can be damaging.
Stockpile key supplies
If you’re starting a business that’s going to be selling physical products, it’s important that you have a healthy stock of supplies. This is because, as inflation starts to bite, the cost of these supplies is going to start to increase.
As such, if you have the opportunity to buy in larger quantities at a lower cost, you should definitely take it. This will help to insulate your business from rising costs in the future.
Of course, timing is everything here, and knowing when to buy is crucial to your success.
Stay close to the news
As they say, knowledge is power, and understanding how inflation impacts every element of your business is crucial. Does the media suggest an interest rate hike is around the corner? In these cases, make sure that you’re still going to be in a position to fulfil any financial loans you may have.
It might not even be in relation to your home country. If you import products internationally, keep tabs on the worldwide news as other countries can have varying means of dealing with inflation – some of which may impact you.