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How will inflation impact your business in the coming year?

Each year, the value of the US dollar decreases somewhat due to inflation. The economic force of inflation fuels speculation and prices across sectors. This year inflation is higher than it has been in 30 years, and it may hurt businesses that struggle to adjust.

The risks accompanying inflation

Inflation on consumer goods was over 6% last month. While consumer goods such as food and personal products do not necessarily mean inflation on commercial property and businesses, they can. All aspects of the economy are interrelated, and inflation may cause trouble for your company in many ways, such as:

  • Your workforce: Even if your company does not provide consumer products such as food or goods, your workforce still needs them. Regardless of how generous, their salaries may not go as far, leading many to seek new employment elsewhere.
  • Your sourcing: If consumer products prices have risen, the chances are that the materials that go into them are also growing. Even if your business is primarily service-based, such as marketing or accounting, your overheads may rise.
  • Your energy costs: Energy costs are rising across the country and here in Texas. Rising energy costs go hand in hand with rising overhead costs, but it is so significant that it is a concerning issue on its own.
  • Your customers: With rising costs all over, your customers may find themselves unable to pay for your services. You may end up raising prices to meet expenses and lose your customer base.

Inflation anxieties are ever-present for any business, large or small. While a larger, more established company may initially weather these changes well, extended inflation will cause wide disruption.

Coping with inflation

The worst effects of inflation most often hit companies that stick to “business as usual.” Today’s business landscape requires nimble, thoughtful responses to rapidly changing circumstances. To keep pace with these changes, you may find yourself needing practical, efficient legal advice.

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