How to Deal with Inflation as a Business Owner?
Coming out of the recent pandemic and the current impact of gas prices due to the war in Ukraine, has seen prices go up on almost everything. Inflation is rising quickly and the impact could be devastating if you don’t take control of it.
From reducing your expenses to rethinking your investment for growth in your business, there are ways to protect yourself from inflation.
Here are 4 ways to help you beat inflation:
- Negotiate Lower Prices – Great time to negotiate with suppliers based on current inflation rates. Expenses such as electricity, gas, rent and other general business expenses are easy to negotiate. If you’re buying locally or overseas, then a trade finance facility gives you the option of extending your supplier payments whilst paying them on time.
- Keep Cash Flowing – cash flow is the key to running a successful business. The more cash you have the better it will benefit your business. One way is to look at invoice finance as a way to get paid quicker from clients. This way there is lower risk in terms of you chasing clients for overdue payments. Invoice finance will see that you have cash within 24 -48 hours in your account.
- Tighten your Payment Terms – every day you can get paid quicker by clients will benefit your business. If you run invoices for 60 to 90 days, then reduce the payment days to 30 or even 45 days. You may want to consider the relationship with your existing clients and also what is offered in the industry that you are in. Always good to have best practices in place.
- Have Money in Reserve – Now is the time to look at cash equity in your business. A business loan that gives you flexibility and a facility that you can draw down when you want, is important if you need help to pay unexpected expenses or take on new opportunities.
Now is the time to speak with a Financial Specialist and discuss your current and future financial plans for your business. At Fifo Capital, our experts can help you deal with inflation. Contact FIFO Capital Ireland today.