This episode is all about inflation. This topic is important for business owners to focus on right now so they can figure out the best way to respond. It’s a fact that the conjecture of how inflation will affect business owners has largely been wrong. So why is inflation happening, and what should you do about it? During the episode, you’ll learn everything you need to know.

Simply put, the money supply has exploded, and you don’t need to be an economist to understand this can have a profound effect on the value of the dollar. No matter why this specifically has come to be, inflation is here.

Thirteen months ago, the general advice was to purchase more assets. Also, if you had variable rate debt, it was recommended to lock in a fixed rate. Lastly, one other tip was to plan for a higher safety stock in inventory due to impending increased prices if possible, giving yourself a buffer for inflation. This advice is still good advice, and to whatever extent you can still make these changes, you should.

As a business owner, how do you know if you’ve done enough to stay ahead of inflation? Figure out if you’re maintaining your gross profit and gross margin. Start by looking at your base and assessing how changes are influencing your gross profit and margin. For your profit to keep pace with the inflation, it has to go up accordingly.

You may be hesitant to increase the prices in your business for fear of losing your customers to your competitors. If price is your only differentiator, you may struggle with price changes. Putting yourself in the mindset of the customer and focusing on unit sales will help you maintain perspective through inflationary times.

We reference this insightful article from May of 2021:

https://www.emergedynamics.com/post/no-this-inflation-isn-t-transitory