My Inbox is seeing more and more newsletters talking about managing during an inflationary period.
One article I read said, “Corporate leaders of the past few decades have been spared the tremendous difficulties that come with trying to drive a business in an inflationary period. Few executives likely have any memory of how to do it at all. Now they will be on the front line. It’s one thing to talk about inflation at the macro level and another to keep your business healthy as the world as you know it comes unglued.”
He is right. Today I am on the edge of retirement. I was just graduating college in the late 70’s and inflation was the highest since just after World War II. It has also never been close to that level since 1980. So, running a business in an environment like this is new territory for my generation and any after .
In the rampant inflation of the early 1970s, companies credit ratings were in peril as they bled cash. Inflation was crippling nearly every company in the world, while also stalling the ability of the middle-class to get ahead economically, let alone stand their ground.
Now inflation is back, and companies are raising prices. The Consumer Price Index (CPI) has been rising for the last year. It isn’t just big consumer brands. A recent survey found 61 percent of small businesses in the U.S. had raised prices for their goods and services in January–the highest percentage since 1974. The CPI (for all items) in January 1974 was 9.6. In January of 2022 it was 7.5 and appears to be going up.
Knowing there is a problem is half the battle. PlastiCert plans to manage the situation, learn what we can about what to do and how to handle economic condition. That is what you should expect from a key supplier. What are your other suppliers doing?