By Dave Hickey
The turmoil of the pandemic is almost behind us, and businesses are now facing challenges which, combined, will be bigger and longer-lasting than those experienced over the past two years.
Inflation and interest rate increases are the twin tests facing us all over the coming years. These are increasing at rates not seen in a generation presenting problems many business owners have not met before.
On top of this, many businesses will also have to plan for repayment of warehoused Revenue debt which was built up during the pandemic.
Below we look at some of the underlying challenges and later in the week, we’ll look at how you can take action now to develop plans to deal with the potential outcomes over the next couple of years.
With inflation at levels not seen since the 1980s the impact on business will be seen in many ways including:
- Reduced consumer demand
- Increased product costs
- Potential staff increases
- Supply chain constraints
- Energy cost inflation
One of the ‘cures’ for high inflation is an increase in interest rates. Rises have already happened in some jurisdictions and the European Central Bank has signalled the first of several planned increases for next month.
Allowing businesses to postpone payment of PAYE, VAT, etc. was a key element of the government’s battle against the impact of Covid on the economy. It has been largely successful, and Revenue has signalled its intention to start seeking payment of the accumulated debt starting this year.
This adds another layer of complexity for business owners already tackling the Inflation and Interest Rate challenges.
On Thursday we’ll post six tips from DHKN’s experts on how you can prepare your business to deal with these challenges.