The return
of inflation and the weakness of the
dollar are bad for businesses all over the world, not just the USA.
However, once again one man’s threat is another man’s
opportunity.
Businesses which take account of inflation and exchange
rates in their procurement and their marketing will have a competitive edge
over those which do not.
For example, sellers should be more insistent on payment up
front and buyers should try harder to avoid it when inflation is devaluing the
money.
Similarly, fluctuations in the exchange rate make it all the
more important that even small businesses consider procurement and marketing
aboard more seriously, and also consider the full range of currency options
when they look overseas.
Even over a relatively short term, inflation or rapid
currency changes can now be greater than the margin of profit or loss on the
deal, especially with a fixed price contract.
This will work against most businesses, but the one which
can make it work in its favour will be making money where others lose it.