Inflation...what is it and what should your business be doing about it.
Oftentimes we at Coveted will refer to ourselves as the personal trainer for your business. We’re constantly working with our clients so that their businesses are in the best shape possible - regardless of what life is throwing at them. Right now, we’re “cross-training” in order to combat our latest obstacle...inflation.
What is inflation?
The technical definition of inflation is the rate at which the value of a currency is falling and, consequently, the prices for goods and services are rising. While we can’t see the value of our currency falling, we can see - and definitely feel - the price increases. The most notable inflation pressure can be seen in energy and food, which rose 23.6% and 2.4%, respectively, from a year ago according to CNBC.
Our needs as humans are not limited to just energy and food, we rely on healthcare, entertainment, transportation, and more for a comfortable life. Therefore, “inflation aims to measure the overall impact of price changes for a diversified set of products and services, and allows for a single value representation of the increase in the price level of goods and services in an economy over a period of time,” according to Investopedia.
Overall, that single value rate of inflation is surpassing most economists' predictions. According to The Wall Street Journal, consumers should expect prices to rise 4.8% in the fourth quarter of 2021, which is up from the original 2% prediction made by the Biden administration of May this year. So this begs the question, what should my business be doing to offset these price increases?
Protect your people
While this may seem contradictory, we’re encouraging our clients to invest in their employees like never before. Just like your business is feeling the pressure of increased costs, your staff is feeling it every time they shop for groceries, fill up their car, or run their weekend errands. With talent being harder than ever to find, it’s crucial to protect your key employees. Our Coveted Case Managers are working with each of their clients to determine compensation strategies that will work for both the employee and the employer.
Invest in automation
At Coveted we believe the decreased labor pool is not just a phase, especially in the manufacturing and trades spaces. The Business Insider quotes, “skill gaps and a dwindling talent pool present lasting dangers for the manufacturing industry. An inability to address those issues could leave as many as 2.1 million jobs unfilled and cost the US $1 trillion in economic output by 2030.”
Now is the time to develop a plan for your own facility, because no matter how competitive your new employee packages are, there will be a shortage of labor. Our clients are working with both equipment manufacturers and computer programmers to build machines specialized for their warehouse line needs.
Automation is not limited to the production line as there are so many tools available that will make administration more efficient for front office staff. In the bookkeeping space alone, there have been a number of cloud-based software introduced to the market that guarantees savings in time and money. Internally we have invested in training our staff to help clients automate their financial processes. We know which programs work the best, how to implement them, and most importantly, the best way to train staff to utilize them.
Whether you’re looking to keep the staff you have, invest in new machinery, or develop automation processes, Coveted can help your business combat inflation. Plus, we’ll make sure you are an “A” client in the eyes of your bank so you secure the best lending terms for the next phase of your business. Contact us today for a complimentary meeting to assess your business’ future health and how we can help.