Really bad news about my home finances

Really bad news about my home finances

Inflation was a significant challenge for businesses in 2022. If you’re a California business owner, you know this. If you’re not, just ask decision-makers at any company what kept them awake at night this past year. Inflation is sure to be high on their list, if not at the very top of it.

And, unfortunately, it will surely be a factor in business operations in 2023.

If there’s any silver lining to the cost increases your company likely wrestled with this past year, it’s that you’re probably operating leaner than before and consequently better positioned to continue that battle in 2023. But you don’t have to settle for your current state of financial fitness. If your company is like most, there’s more you can do to fight inflation in 2023.

Take California business insurance, for example. Ensuring you have the right coverages and the appropriate limits is crucial. Few companies can afford to be uninsured or underinsured in today’s economic climate. And reviewing your small business insurance is just one tactic for getting your finances in order.

Read on for the complete list of recommendations.

Proven Steps for Protecting Your Business From Rising Costs

Inflation will affect your company. That’s a given. There’s no way to insulate your business from its effects altogether. But you can minimize those effects by doing the following:

  1. Use incentives to accelerate cash flow. You’ve got to have ample cash reserves to address rapidly rising expenses. Incentivizing customers, vendors, and others to pay invoices faster is an effective way to ensure you’ve got the capital you need to pay your bills and keep the wheels of commerce turning.
  2. Shorten your supply chains. Pandemic-driven supply chain disruptions continue to cause problems for businesses. However, many find that shortening their supply chains not only improves their operations but can also lower their costs and counter inflation.
  3. Find ways to leverage automation. How is work getting done at your company? There are likely tasks your team is completing manually that could be automated. If so, putting business automation systems in place can be a great way to fight inflation. And importantly, automating tasks doesn’t mean eliminating jobs. In fact, by taking tedious jobs off your employees’ plates, you free them to take on more challenging, meaningful work. That’s good for their sense of pride and career development, and it’s good for your company.
  4. Consider changes to your service contracts. It’s common for businesses to pay a little more than they should for a particular service simply because they don’t take the time to assess their options and make changes if appropriate. Now is the perfect time to do that evaluation and save money by renegotiating contracts and eliminating unnecessary services.
  5. Evaluate your business insurance coverages. This is an inflation-fighting tactic that companies sometimes overlook. But it’s an important one. Inflation drives up the replacement cost of business equipment, infrastructure, and other assets. If your insurance policy limits aren’t high enough and a machine breaks down, for instance, you can be left with a significant out-of-pocket expense. That’s problematic in the best of times. When inflation is high, it can be even more financially painful. But you can avoid that scenario by contacting your business insurance provider to review your coverage and make changes if needed.
  6. Stay alert and informed. The phrase “keep your head on a swivel” is often used in sports to mean you need to be aware of attacks from your opponents. In this case, the opponent is rapidly and dramatically changing economic conditions. Staying informed helps you be agile in how you handle those changes.

Be Proactive in Inflation-Proofing Your Business

Where will the inflation rate go in 2023? Nobody knows for sure. But what is certain is your business will suffer if you spend the year in reactive mode rather than being proactive about your finances. If, on the other hand, you’re proactive, you can expect to end the year in a much better position and ready for whatever 2024 brings!

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