Inflation Opportunities in Your Business
No, I'm not talking about deflategate, inflategate, or the pearly gates. I'm talking about the opportunities with high inflation. Everyone talks about the negative side of high inflation, but there are a lot of positives too. Let's spend a little time thinking about the opportunities with high inflation. Here are a few areas to think about:
For the longest time it's felt like we have not been able to get any interest on the cash that we have on hand. Now, with higher interest rates, we are seeing some nice returns in things like US Treasury bills or even Money Market accounts. If you're looking to have your cash on hand do a little extra earning for you, reach out to your bank representative and inquire about your options. Be smart and plan out your cash needs.
The cost of producing your product probably has gone up over the last year. Passing the increased cost on to your customer isn't always achievable. If your higher price makes the customer go somewhere else or not make the purchase at all, then you lose. Think about developing new products at lower prices to maintain or increase your share of the customer's wallet. This has the possibility to make your business stronger than before high inflation set in.
Now is a great time to rethink your supply chain. Inflation isn't your only issue here. COVID is still causing significant problems, and the war in Ukraine is also an issue. Look to on-shore your production and raw materials if you can. This may (or may not) be even more expensive, but now you have a better chance of getting what you need when you need it. It may also be a great way to improve quality.
Lastly, Know Your Numbers! How can you make any decision without knowing your business and its Key Metrics? Leverage digital capabilities to improve data-driven insights into your business.
PS. According to a recent study, over 80% of CFOs expect to raise prices. They plan to do this over the next 3 to 6 months. Does this mean inflation is going to be around for a little while? I think so.