Workplace Task: 10 – Understanding Risk - Innovation

1. Purchase real estate. Some people think that the stock market is a good place to invest their money in the expected environment, which may be true. I am not a stock expert. And I am not a real estate expert. But I do know that real estate prices are usually conscious of the purchase of buildings with currency, and a piece of land or office space can usually be a good defense against inflation. Volume, an additional benefit is that you can do this at a very low interest rate. result.

These people see this trend and they know that prices and interest rates will rise. No one panicked. But believe me, they are all preparing. Hope you too. 

2. Lock in long-term loans. Of course, floating rate loans are good in a low interest rate (or lower interest rate) environment. But now is the time to renegotiate. Now it’s time to lock them in with a long-term fixed interest rate.

3. Buy now. Want to buy new equipment? Or a piece of property? Maybe your truck is wearing out. Is there an order from a large customer that needs a lot of materials in the next six months? Now is the time to buy, especially for long-term assets that need financing. Even for short-term assets such as inventory, you know that there will be turnover. You'd better trade now and get any discounts through bulk purchases. Will cost you.

4. Expand and maintain the expected expenditure. Higher increments and inflation have various macroeconomic effects. Many economists think this may be healthy. Many others worry that this will damage confidence, depress the market, cause uncertainty, prohibit investment and limit consumer spending. In the past few years, we all know, no one knows. But most business owners I know, especially those who survived the last economic downturn, are still very wary of increasing manpower and management costs. They extend the service to any place. They maintain expansion and stability. When the economy was disrupted again, they were gradually storing cash. You should do the same.

These people see this trend and they know that prices and interest rates will rise. No one panicked. But believe me, they are all preparing. Hope you too.

5. Sell assets. You are not the only one considering buying. There are many other people thinking the same thing. So turn to your thoughts. Do you no longer need any equipment? Is there a large inventory? A property that you no longer need. Even size... the less profitable sector? Maybe...wait...your entire business? Interest rates are so low that many buyers want to trade immediately and lock in financing. This may be when you uninstall some extra assets. Even your entire business is the same.

6. Check the price again. Do this exercise: Take the 20 jobs, products or services you have done in the past six months, sit down and do a thorough cost analysis. Did your profits meet your expectations? Now, check the materials, wages and administrative expenses of these products. Which are under inflationary pressure? How likely are these price increases? How much impact will these increases have on your profits? It is your job to ensure that these margins are consistent. If you cannot control costs, you need to increase prices. Are you ready? Are you ready for customers?

7. Lock long-term suppliers. Have you had multi-year supply agreements with the largest suppliers? Now may be the time to consider this. If you have the ability to make purchases in the next 12 to 18 months, then you may find that supply if you know there will be inflationary pressure, this is a way to better control your future profits. Maybe you should do the same with current customers-increase the price by 3% to 4%, and then see if they want to make a commitment to future business.

8. Lock long-term employees. In the long run, employment trends are changing. People are emerging and looking for work. More and more job opportunities. You will face challenges and need to provide incentives to keep better people around. But most importantly, you will want to make sure that key employees are not anywhere and their costs are still affordable. Therefore, it's time to step up an employment agreement with them to show that you care about them. However, please avoid to avoid increasing the cost of living. Instead, provide bonuses and incentives based on performance. And lock in reasonable wages for the next three to five years. This will also lead to control of large order items in the income statement.