--- title: "HIGH INFLATION: WHAT DOES IT MEAN FOR YOUR BUSINESS?" description: "High inflation is hitting businesses and households hard this year. Across the world, inflation is running high, thanks to factors like pandemic disruptions, monetary stimulus and supply-chain issues.\n\nYou’ll be starting to see the effects of inflation at the supermarket, the fuel pump and in your business.\n\nEroding your buying power\n\nInflation increases prices, which eats away at your buying power. For business owners, that means you’ll encounter higher costs from your suppliers. Materials are more expensive, transport has become more costly and everything, from office supplies to utilities, is rising in price.\n\nIn addition, your staff may be asking for pay rises. To keep up with inflation, your income needs to increase by at least the same amount as inflation and to achieve that could mean a seriously large wage bill increase for your business.\n\nRising interest rates\n\nBanks try to keep inflation at a sustainable level and react to high inflation by raising their interest rates. This, in turn, slows the economy and puts a handbrake on inflation. As a business owner, you’ll see this reflected in a higher cost of borrowing and if you have a home loan, this will be true as well.\n\nInflation does have some positive side-effects for your business. First, it tends to push up the value of big-ticket assets such as property. Second, it makes debts seem smaller – the amount of debt stays the same but hopefully your income rises.\n\nIt’s time to raise your prices\n\nThe rise in prices means you’re spending more so it may be time to consider raising your prices. If you’re wondering how much you need to increase prices in order to keep up with inflation or maintain your margins, give us a call. We can work with you to find the best price for you and your customers." image: https://web.archive.org/web/20230125013608im_/https://balanceca.nz/wp-content/uploads/2022/05/inflation-money-1024x577.png --- [![Ecom](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/Logo_1.png)](https://balanceca.nz/) - [Home](https://balanceca.nz/) [![Ecom](https://balanceca.nz/hs-fs/hubfs/raw_assets/public/codfina/images/image_web/startup.png?width=60&name=startup.png) Start-ups](https://balanceca.nz/start-ups) [![Established](https://balanceca.nz/hs-fs/hubfs/raw_assets/public/codfina/images/image_web/establishedbusinesses.png?width=60&name=establishedbusinesses.png) Established Businesses](https://balanceca.nz/established-businesses) [![Agricultural](https://balanceca.nz/hs-fs/hubfs/raw_assets/public/codfina/images/image_web/agriculturalbusinesses.png?width=60&name=agriculturalbusinesses.png) Agricultural Businesses](https://balanceca.nz/agricultural-businesses) - [About](https://balanceca.nz/about-us) - [Services](https://balanceca.nz/services) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_1.png) Annual Accounting & Tax Services](https://balanceca.nz/services#nav_f4) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_2.png) Business Support Services](https://balanceca.nz/services#nav_f4) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_3.png) Business Development](https://balanceca.nz/services#nav_f4) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_4.png) Business Planning](https://balanceca.nz/services#nav_m4) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_5.png) Cashflow Management](https://balanceca.nz/services#nav_m4) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_6.png) Accountability Coaching](https://balanceca.nz/services#nav_m4) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_7.png) Succession Planning](https://balanceca.nz/services#nav_m4) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_8.png) Organisational Review](https://balanceca.nz/services#nav_b3) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services%20icon-9.png) Governance](https://balanceca.nz/services#nav_b3) [![](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services-10-01.png) Specialist Māori Sector Services](https://balanceca.nz/services#nav_f4) [![](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/11_Connections.png) Connections](https://balanceca.nz/services#nav_b3) # BALANCE Take control of your finances with BalanceCA, your trusted partner for all your accounting and financial needs. 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Tags: [Marketing](https://balanceca.nz/blogs/tag/marketing) [Business](https://balanceca.nz/blogs/tag/business) --- ![Balance CA](https://balanceca.nz/hubfs/kamato-1.png) [Balance CA](https://balanceca.nz/blogs/author/balance-ca) Updated: June 05, 2023 Jan 20, 2024 6:39:34 PM --- ![](https://web.archive.org/web/20230125013608im_/https://balanceca.nz/wp-content/uploads/2022/05/inflation-money-1024x577.png) High inflation is hitting businesses and households hard this year. Across the world, inflation is running high, thanks to factors like pandemic disruptions, monetary stimulus and supply-chain issues. You’ll be starting to see the effects of inflation at the supermarket, the fuel pump and in your business. **Eroding your buying power** Inflation increases prices, which eats away at your buying power. For business owners, that means you’ll encounter higher costs from your suppliers. Materials are more expensive, transport has become more costly and everything, from office supplies to utilities, is rising in price. In addition, your staff may be asking for pay rises. To keep up with inflation, your income needs to increase by at least the same amount as inflation and to achieve that could mean a seriously large wage bill increase for your business. **Rising interest rates** Banks try to keep inflation at a sustainable level and react to high inflation by raising their interest rates. This, in turn, slows the economy and puts a handbrake on inflation. As a business owner, you’ll see this reflected in a higher cost of borrowing and if you have a home loan, this will be true as well. Inflation does have some positive side-effects for your business. First, it tends to push up the value of big-ticket assets such as property. Second, it makes debts seem smaller – the amount of debt stays the same but hopefully your income rises. **It’s time to raise your prices** The rise in prices means you’re spending more so it may be time to consider raising your prices. If you’re wondering how much you need to increase prices in order to keep up with inflation or maintain your margins, give us a call. We can work with you to find the best price for you and your customers.   ![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/Logo_1.png) ##### Balance Whanganui - [0800 480 062](tel:+640800480062) [06 348 0062](tel:+64063480062) - [whanganui@balanceca.nz](mailto:whanganui@balanceca.nz) - 10 Dublin Street, Whanganui, 4500 PO Box 670, Whanganui, 4540 ##### Balance New Plymouth - [06 769 5389](tel:+64067695389) - [newplymouth@balanceca.nz](mailto:newplymouth@balanceca.nz) - 141 Powderham Street PO Box 593, New Plymouth Central, New Plymouth 4310 ##### Balance Stratford - [06 765 6156](tel:+64067656156) - [stratford@balanceca.nz](mailto:stratford@balanceca.nz) - 199 Broadway, Stratford, 4352 PO Box 670, Stratford, 4352 Balance Official 2026. All rights reserved. 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