Call Us +1-555-555-555

The impact of inflation on small businesses

30 November 2022

Inflation can hit small business hard, but there is things you can do to prepare and minimise the impact of tough economic conditions.


Every quarter, the Australian Bureau of Statistics (ABS) announces what’s known as the Consumer Price Index (CPI). This is how we measure price rises, otherwise known as inflation.


It’s calculated by looking at the total cost of an average Australian household’s shopping basket compared to the same quarter in the previous year. In September, price rises climbed to 7.3 percent year-on-year. This is particularly high, as the Reserve Bank of Australia (RBA) is trying to set interest rates to see inflation sit between 2 and 3 percent.


Inflation largely impacts small business in two ways:

  • Business costs rise
  • Customers spend less as they tighten their wallets.


What can you do to minimise the impact of this?


Understand your cashflow

To make informed decisions on spending and price changes, you need to have a clear understanding of your incoming and outgoings funds. You need to know your numbers. 


Create a plan

Creating a budget and having a plan to keep your business running through a disruptive time is important. Xero has some guides and templates on their support website and we can help you in a variety of ways dependent on your time and budget.


Make it easy to collect payment

Look at automating invoice payments and reminders using your accounting software and payment platforms such as Stripe or GoCardless.


Stay close to your advisor

Keep in touch with your accountant who can assist you with all things numbers related as well as systems or processes that will help you run your business more efficiently.

Latest News

17 January 2025
Navigating Inheritances. Nicholes Family Law Partners Nadine Udorovic and Bec Dahl chat to Danny Archer and Damian McMahon. Together, they delve into the complexities of inheritances, offering valuable insights from both legal and financial perspectives on how to navigate this important topic.
18 December 2024
Watch the video above from Thayne. As 2024 comes to a close I thought I'd take the opportunity and send a thank you note to you all as gratitude for your continued support and loyalty. Throughout 2024 we have experienced; 1. Exceptional investment returns from all asset classes and sectors: ASX 200 up 23% S&P 500 up 30% AUST. Bonds up ~4.5% INTERNATIONAL Bonds up ~6% Aust Retail Property Trust up 39% 2. This hopefully reminds you all that it's best to remain invested even when economic conditions are uncertain. 3. We are actively monitoring and keeping an eye on US economic data particularly to understand which direction inflation may head, how this will impact interest rates and currency valuations, will there be a resurgence of small companies, emerging markets and bond and property prices. 4. With our research team we are well positioned to keep on top of the ever changing landscape, making investment decisions to maximise returns and minimise risk with regular investment committee meetings and analysis of data. 5. For many of our actively managed investment portfolios we ranked in the top 5 if not top 10 of throughout the course of the year which is a testament to the structure of Mulcahy & Co offices, people, systems and processes that we continue to build on to provide a quality service and outcomes to you all. 6. Please remember here at Mulcahy & Co the Financial Planning team is a part of a bigger network incorporating Accounting, Lending and Legal to deliver Financial Security 360 to make sure all of your financial needs are met and complement each other to achieve your goals and objectives. Once again I'd like to thank you for your support and wish you and your families a Merry Christmas and happy new year. The Mulcahy & Co Financial Planning Team
1 November 2024
We meet Accounting Partner Eamon and Mark from Compass Business Accountants who has joined the Mulcahy & Co Group operating from our Toowoomba, Queensland office. Host Gavin Nash talks to the pair who are operating from this thriving inland city and what services they offer their clients.
Show More
Share by: