Date: March 17, 2023
Market Trends Are Impacting Business Owners
It’s no secret that American Entrepreneurs are struggling to stay afloat with the impacts of inflation higher than they have been in years. It doesn’t matter what size your small business is or where it is located – inflation is the top concern for small businesses regardless of location, size, or industry (1).
Inflation can impact business owners in several ways, including:
1. Increased Costs: As inflation occurs and the cost of goods and services increases, businesses’ input costs increase. This can lead to a decrease in profit margins as businesses may have to increase their prices to maintain their profit margins.
2. Reduced Purchasing Power: As inflation rises, the buying power of money decreases. This means that businesses may not be able to purchase as many goods and services as they previously could with the same amount of money. This can impact production and sales.
3. Wage Inflation: To retain employees and keep them happy, businesses may be forced to increase wages as the cost-of-living increases. This may lead to an increase in labor costs for businesses. Most business owners are all too familiar with the changing labor market and how even the least amount of output demands higher and higher wages.
4. Unpredictability: High levels of inflation can lead to unpredictability in the market, making it difficult for businesses to plan and budget effectively. This can lead to decreased investment and growth or unintended consequences when things don’t go as planned.
Overall, inflation can have a significant impact on the financial health of a business. It’s important for business owners to stay informed about market trends and work to manage their costs effectively, now more than ever.
Correa, Pearson and Associates is helping their clients overcome the impacts of inflation by ensuring they always have ample savings set aside, that there is always more than one set of eyes on their overhead costs and that unnecessary expense cuts are being made each month, and that they have clear visibility into their present (and FUTURE) cash flows. If you are concerned about what is happening in the economy and the impact to your business – we have specialists on standby waiting to help.
Click here to book a call with one of our strategists to see how we can help.
References:
(1). Thaddeus Swanek, US Chamber of Commerce (The Biggest Challenges Small Businesses Are Facing Right Now)