Talk of inflation continues, and more government spending is in the works. But how do we know what the impact of that spending will be? And what can we do now that will position our businesses for surviving inflation?
Since its founding in 2006, MLA has been through difficult economic times. And our team has decades of experience in finance that can bring a valuable perspective and expert advice, including on preparing for inflation. We were recently featured in an article on inflation on CFO360.com.
Prepare for Post-Pandemic Inflation
This is our third article on preparing for inflation. Click here to see the others or see a condensed version of these articles in the CFO360.com post mentioned above.
Aggressive government spending is a well-documented factor that contributes to inflation. And a substantial investment in infrastructure is nearing approval. This is on top of the massive response of the US Government to the recent COVID-19 pandemic.
This government spending will impact the economy for months and years to come. And the specific effects will not be understood for some time. While these government decisions are out of our hands, we can take steps to protect ourselves against their potential impact.
Previously, we have discussed the importance of cash reserves and effective financial reporting to provide early warnings against the impact of inflation. We will now discuss a third essential place to prepare, which is vendor and customer relationships:
While small to mid-sized businesses can be overly affected by inflation, they are often in the best position to respond quickly. These businesses represent a network of relationships that often involve other community concerns.
The pandemic has shown us that we can get things done quickly in an informal way that would be too complicated during regular times. That same spirit of business ownership can help us survive the effects of inflation.
Contact us to learn more.