Consumer prices are rising faster than they have in the last forty years. According to CNN: “In March, the Fed ramped up its benchmark borrowing rate for the first time since late 2018, increasing it by a quarter-percentage point.” Americans are feeling the crunch with elevated gas prices (the US average reaching $4.37 per gallon this past week), rising rent costs, and even prices for meat and groceries still on the rise. Meanwhile, small businesses find themselves playing catch up, and larger companies are experiencing increasing year-over-year costs to operate. Its employees and business leaders feeling the brunt of this inflation stress, and many businesses are wondering how to beat inflation and stop the stress.
US economics and politicians are working through the causes and resolutions to this 40-year high in inflation, and Americans are also staying prepared. When inflation is high, the cost of living goes up. Many Americans are spending less money, cutting back on the extras, and driving less to fight the cost of inflation. When inflation is high, it can tempt the Fed to get involved, which is expected to raise interest rates to combat inflation.
Rising Interest Rates
Many businesses benefited from lower interest rates and a healthy economy in the past few years. In 2022, many companies are now expecting and preparing for the Fed to continue to raise interest rates. Higher interest rates, of course, impact business planning, cash flow, customer saving, and spending.
How to beat inflation in your business
- Streamline processes to improve productivity
- Do quarterly reviews and analyze profit margins
- Cut expenses and add automation
- Stock up on supplies now
- Revisit prices and pricing strategies
- Practice stress management
As a business owner, be aware of how inflation and interest rates will affect your business and how to combat potential losses and stress during this time. High stress, inevitably, will lead to greater chaos and problems if mishandled during economic distress. Keep reading to learn three simple steps to relieve business stress.
Business Stress Relief
#1 Tidy Up
When economic chaos seeps in unexpectedly, it is best to become overly organized. Tighten up any loose ends, and stay on top of deliverables. Analyze processes and determine where you can apply automation to reduce human error and cost. You will eliminate a significant amount of high stress through organization and automation because there will now be fewer open holes that could potentially cause a problem. Feeling more in control will lead to less stress overall.
#2 Be Proactive
Now is the time to take strategic action to boost your business and protect it from future inflation or higher interest rates. Action might include stocking up on supplies to avoid supply chain issues, implementing new systems, or creating a new product or service in response to your audience’s needs. Take action to create a clear path for the foreseeable future, even if that means you pivot as the economy pivots.
#3 Identify Financial Stressors
Clearly identify any financial stressors within the business now because avoiding it will only cause stress later. Look at what you can cut and where you can spend. Omit what is no longer needed, and be flexible enough to make the best changes for the business.
Do you have more questions about how your business can beat inflation, interest rates, and stress? Contact BOAR today to learn more and become part of a greater community of business owners, executives, and community leaders. Expand your knowledge and get more business advice and workplace strategies from our blog here.