The Chinese Language has hundreds of thousands of hieroglyphs, each having a unique meaning except one. It’s the hieroglyph for the concepts of crisis and opportunity.
In the Eastern mindset, they’re the same. Each crisis is an opportunity, and every opportunity is also a crisis.
From what I see in several markets, many are using the current season of tariffs as an opportunity for significant profits.
In my last column, I wrote the following..
1 – The President had ordered a new round of 10% to 12.5% tariffs to replace the ones that just expired.
2 – Economists at The Fed estimate that through February, the levies broadly lifted the cost of core goods by about 3.1%.
3 – Also that economists at the Fed had put the overall tariff effect on core consumer inflation at about 0.8%.
If normal inflation is about 2%, and current inflation is 3.5%, why are many industries seeing a 20% to 30% price hike from their suppliers? How does any of that math even begin to work when overall inflation is only 1.5% above the norm?
It doesn’t. Many industries that maintained price stability for the last several years are using this crisis as an opportunity to make significant profits.
How easy is it to raise prices and blame the government? Pretty easy.
Let me leave you with this…
Again, many should consider this crisis an opportunity.
I’m not suggesting that anyone gouge their customers. Under no circumstances is that my suggestion, but business is business.
Your approach to all of this should be two-pronged.
On the one hand, you need to watch your monthly financials and supplier costs like a hawk. Maintaining your margins through difficult times is the core of what enterpreneuring is all about.
But you should also be shopping your competitors. See what their pricing structures look like.
If you have any room to increase your prices while remaining competitive, get to it.
That’s money you’ll need sooner or later. Again, business is business.
If you have any questions, let me know.
As always, if you’re having difficulties with your accounting and tax work, please don’t hesitate to contact us. We’d love to help.
We’re all going to get through this. Let’s get through it together…
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, Accounting and Tax Work, Tax Planning, or Tax Representation, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
www.AccountingSolutionsLtd.com
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