Worries of Stagflation? We already know there is inflation. But are we seeing signs of the dreaded stagflation in the economy? Who knows, only a picture in the rear view mirror can tell us. But regardless of the terms we use, businesses are experiencing some turbulent and uncertain times. We are handing you the keys that might help your navigate these challenging times.
We anticipate that for an extended period, revenue may flatline while costs keep increasing. If you have exhausted the cushion you had set aside, it is time to take some other strategic measures to preserve the cashflow.
KEY #1 – Keep the cost of debt to a minimum. And if interest rates are rising, consider replacing any variable interest rates loans with fixed rate interest payments. The fixed rates may feel high now, but if the Feds launch into drastic action, you will be prepared. Conversely, when the interest rates fall again, you can refinance at the lower rates.
KEY #2 – Become a landlord. During stagflation, rents may increase and your business’s revenue might not. If you have extra cash available, consider buying the building in which your business operates, then rent the other half of the building to other tenants. Of course, purchase wisely. There are very friendly loans available to support purchasing commercial real estate for occupancy and rentals. So explore all of your options.
KEY #3 – Be opportunistic about acquisitions. Companies that are going out of business or need to raise cash may sell property or equipment at below market prices. Consider acquiring commercial property, equipment, assets, brand lines or staff with needed skills to augment the business you are operating.
Likewise, consider merging/acquiring a competitor, buying a channel, or manufacturing your product in-house if doing so allows both companies to reduce overhead, expand into new markets or offer an expanded array of products or services.
KEY #4 – Augment staff with technology. Embrace automation in your business can supplement the staff and allow people to do more with less. If you have been resistant to incorporating technology into your daily business routine, you may be missing one of the biggest opportunities for growth in your company and for your staff. Technology can enhance your product output as well as offer a better customer experience. Should you higher staff person, or should you invest in technology that helps everyone grow. Business loans are available to expand your business technology needs and help your business be more cashflow positive.
This is the time to think strategically and put the sound principles into action. This year will be another year of change to stay alive, or you can make it a year of change and leverage the opportunities coming available. Ultimately, its these times that help us grow and expand into places we did not even know existed. Protect the cashflow, manage the cash, and leverage debt where possible.
We are here to find the strategies and the loans that help propel your business forward.