Board Converting News, May 17, 2021

Gene Achieves (CONT’D FROM PAGE 1 )

Locking in long-term agreements with suppliers now is another way to save money down the road, Marks ad- vised. “Commit to purchases over the next two to three years to lock in prices and get a handle on any potential price increases before they arise.” Lastly, when preparing for price increases, many com- panies are taking a look at their existing employees and are locking in employment agreements for the next few years to avoid annual haggling and negotiations. Other companies are also speaking to their bankers about converting their short-term debts and working cap- ital into long-term financing at fixed interest rates. Shop- ping around with banks should be considered. He also noted that locking into long-term lease agreements or purchasing property may be good decisions. Marks said the best advice he can provide is to lever- age forgivable loans from Small Business Administration programs like the 7A or 504 loans to purchase inventory or property and prepare for inflation. “If you get these loans by September of this year, your first three months of prin- cipal and interest are completely forgiven up to $9,000 per month,” said Marks. “If you’re looking for any financing, talk to an SBA lender about a 7A or a 504 loan, because it’s a cheap way to get some money from the government.” Supply Chain Issues Marks next discussed supply chain issues plaguing manufacturing across the U.S. and the world. Marks re-

“There are three big things that are really going to be driving us this year: the economy and inflation, supply chain issues, and labor,” said Marks by way of beginning a deeper dive as to why these issues are affecting compa- nies and how some successful companies are overcom- ing the challenges that have been handed them over the course of the past year, largely sparked by the pandemic. Marks addressed the first major concern: Inflation. “The main question that everyone has about inflation is, ‘Will the oversupply of money drive the price of the dollar down?’” No one has the right answer, Marks admitted, adding that many economists see inflation rising due to the dramatic increase in the national debt and deficit. “We’re not going to see 10 to 15 percent inflation like we saw in the 80s, but three to five percent inflation is not far off. You already see it in the price of paper, wood and labor. That is all having So what actions should the business owner take? Marks provided AICC members with guidance on how compa- nies should be preparing and operating in an inflationary environment. He said his business clients are preparing for price increases over the next couple of years by revis- iting and revising all of their pricing, particularly for their top customers. “Customers know that price increases are coming and they should be expecting this,” he said. an impact on rising prices.” Revisit And Revise Pricing


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May 17, 2021

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