Inflation is top-of-mind for many Americans, including business owners. Small or privately-held businesses currently make up more than 99% of companies in the U.S. and inflation can have a large impact on these organizations if not properly planned for and addressed. Getting ahead of inflation is even more challenging for smaller businesses because they don’t usually have a dedicated, in-house finance and accounting team constantly reviewing financial statements, monitoring expenses and calculating profitability.
When inflation occurs, each dollar spent doesn’t go as far as it did before which ultimately decreases buying power. For example, consider a construction business. We’ve seen lumber, steel and copper all skyrocket in price during the last 18 months. As the business is forced to pay more for materials, its margins are decreased, and profitability is negatively impacted.
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Univest Bank and Trust Co.
