How Inflation Is Good For Economy? | Inflation Good For Business
Hello Hiveans!
If I say inflation can be beneficial for your start up then either you believe or not? If you are planning to start a new business or startup then you need to stay with me on this post. Today I'll tell you about inflation, which is being known as negative, and we known this term as a consumer mind set and we thought it's a negative term which is not good. It can be beneficial for us.
So, let's get started.....
Since few decades, we have seen many changes in global economies, if we talk about Pakistan we all know that at which stage our economy is standing. Inflation break all the things and economy's dropped a lot. A country can develop its economy when there would more and more business and start ups, and growing day by day. Basically, inflation means good's prices being higher and higher. Few years before, when you buy your daily household stuff of 1000 rupees, is that same stuff can be buy today? No. So rising of prices is called inflation. There is a type of inflation which core inflation, in it, food and fuel prices doesn't considered because it's prices fluctuate with passage of time.
A term called runaway inflation, in which when economy raised then demand of products. When there is worse then it is known that after that there will be a better condition. When we take inflation as consumer mind set, it's a very worse time but if we take this as business start up point of view then it can be best time for you to start up or boost your existing business. So when you have a business, you can plan the inflation for your business because when you planned something, you raised the price at fixed time. When your competitors not raising thier prices at that time and when inflation comes, suddenly, competitors raised the prices then it affects thier business consumers. When the customer see the prices are become high suddenly, so they start searching from which place they can buy that stuff or product at same current price. So in this situation, when you raised your price at fixed time and your revenue never lost then you can continue at same price.
During inflation, some companies make alternative like reducing the size of packet instead of raising its price. So a company can save its revenue lost by taking that type of alternatives. And if we talk about another point of view like start up, we found low interest rate or low cost when inflation comes. So you can take benefits from it and can start a new business with a new planning accordingly. When inflation comes it not only affect the prices it also affects the consumers and your business means you are taking raw materials and buy things to run your business, it also being affected by inflation. So, to stay safe in this situation, you can use Japanese formula and save your revenue loss and can invest that saving. This will help you in inflation that business can be boosted by using that saved revenue losses.
So what is the formula, its is JIT, it's a just in time inventory management in which, basically, you are not just store the raw material, when the demands came, you took raw material and accordingly deliver that material to customers. So by using this formula, you can save a lot of cost, means the cost you have to invest in storing material, that cost can be stored.When economy down fall comes, inflation came, there are some companies who want to sell thier stocks which is being stored as a raw material. In this situation, these companies want that they just sell thier products or material with no loss, no profit condition. You can take benefit from this situation, you can do investment and buy that products and can upgrade your business. You also get employees on low wages, so at that time you can start your business because people agreed to do work for you in low cost due to crises.