Inflation doesn’t just affect households, it affects all businesses too!

Depending on the industry you’re serving will directly impact how inflation affects your business.

Today we’re going to take a look at some of the ways increased inflation is currently affecting business owners.

Some businesses may be able to tackle and address some of the reasons discussed below, however some businesses may have no control at all over how inflation affects their business. Each industry is different and unique.

TY Lawyers in Chatswood are proudly very experienced and personable small business lawyers in Chatswood, serving the local business community including the Sydney metro area. So if you’re looking for excellent legal services, look no further than TY Lawyers in Chatswood.

Let’s take a further look at how increased inflation is affecting business owners.

1. Increased Rents

Not only can increased inflation mean increased rents for existing business tenants, it can also be a put off for new businesses currently looking for a commercial premises.

Paying more rent is going to leave most businesses with less profit which isn’t a good thing for business, especially if the tenant cannot maintain the higher level of rent.

TY Lawyers are commercial lease lawyers in Chatswood who can help assist negotiating new lease agreements for tenants and landlords for new and existing rental agreements.

2. Every Aspect Of Business Becomes More Expensive

When inflation increases, everything else increases along with it. Raw materials, equipment, packaging, delivery.. you name it!

In order to help reduce the effect of increased inflation, cost cutting may be required. The business could look into cheaper ways of doing things or cheaper alternatives with regards to their products and services offered.

Any large outlays required for the business can be postponed for now in order to conserve finances.

3. Cash Flow, Purchasing Power and Borrowing Power

Increased inflation ultimately leads to a reduced cash flow along with less purchasing and borrowing power.

This means you as a business owner have less influence or say over new things you want to do.

Some businesses are able to pass on increased inflation costs to customers, depending on the industry, and some are not.

Small business lawyers, like TY Lawyers in Chatswood can offer sound small business legal advice if you’re looking for a professional legal opinion.

4. Supply Chain Disruptions

As things become more expensive across the board, generally other businesses in the supply chain are also looking at ways to cut costs or save money.

Sometimes this can lead to supply chain delays or disruptions, in turn affecting your business!

5. Change In Consumer Buying Behaviour

Increased inflation can cause a lot of customers to be more hesitant in purchasing.

A decrease in consumer spending is generally expected when inflation rises so as a business, think of ways you can remain front of mind and relevant with your target market during this time.

Ways Businesses Can Try To Combat Increasing Inflation

Combat the increasing inflation with your pricing strategy – increase pricing where required in order to preserve your business longevity.

Other things you can do is try to reduce your business’s variable expenses along with locking in pricing for raw materials with long term contracts.

Your business can also look at investing options as an alternative form of income, for example, investing in gold or other commodities.

TY Lawyers are small business lawyers in Chatswood. Our team can assist you with your commercial legal requirements along with providing support as commercial lease lawyers in Chatswood.

Contact us today to discuss your commercial requirements, we’re here to help!

Call today on: (02) 8007 0135.