Coping With Inflation During Already-Challenging Times

In May 2022, consumer prices in the United States rose 8.6 percent – the fastest rate in over 40 years. Inflation has touched nearly every aspect of Americans’ lives, and few have felt the effects more powerfully than business owners. A study conducted by the National Federation of Independent Business found that 33 percent of business owners cite inflation as their number one business concern. When combined with labor shortages, supply chain issues, and other concerns, it is no surprise that many businesses are struggling.

Small and medium-sized businesses are constantly looking for ways to cope with inflation and meet financial obligations without losing clients or customers. Doing so is not a simple task – especially during these unprecedented times.

The Battle to Survive Historic Inflation

Prices are surging on everything from food to gasoline. Simultaneously, workers are leaving jobs at an alarming rate. There is no universal solution to these challenges. Studies show that just under 70 percent of business owners have been forced to raise their prices to contend with inflation. While price increases may help businesses maintain reasonable profit margins, there are many risks associated with this tactic. Customers may find cheaper alternatives, or depending on what a business offers, customers may simply do without. Nonessential purchases and luxury services have fallen to the bottom of the priority list for the vast majority of Americans. However, companies offering everyday staples are also seeing low sales.

It can be hard to know how best to tackle the problem of inflation without driving away customers. About four in ten companies have taken out a loan to offset the financial strain on the business. A similar number have decreased staff by either laying off current staff or not replacing staff who quit. However, these options are not feasible for every business.

Strategizing for Business Success During Exceptional Circumstances

To say that the last few years have been challenging is to massively understate the extraordinary personal and financial obstacles business owners, employees, and everyday individuals have recently faced. An experienced business law attorney can help businesses address concerns, build customized solutions, and strategize for long-term success.

Contact a Naperville Business Lawyer

The experienced Naperville business law attorneys at the Gierach Law Firm understand just how difficult it is for small and medium businesses to keep up with these challenges. We are highly experienced in a wide range of business law issues, including employment concerns, contract review and negotiation, business sales and purchases, tax planning, compliance issues, and much more.  Call us at 630-756-1160 to learn how we can help you grow your business.

Sources:

U.S. Chamber of Commerce 

CNN

Forbes