Just like the 800 pound elephant in the room nobody wants to talk about there sits Inflation, already flowing through the financial system like wildfire but the talking heads say it's "transitory". It very possibly could be but, it's definitely a thing at the moment.
Many of the business owners today aren't familiar on how to survive and even prosper from inflation, the last time this happened for real was in the 70's!
Just like in those years the businesses who did the best were (and still are) the ones who prepared and took decisive actions when the opportunities (yes, opportunities) presented themselves. Inflation makes raw materials cost more but it also provides pricing power.
The one commodity that hasn't increased in price is Capital. That is, the cost of money is the same as it was last year and even lower but just look at the 9-month increases in these items:
Lumber: +265% WTI Crude: +210% Gasoline: +182% Heating Oil: +107% Corn: +84% Copper: +83% Soybeans: +72% Silver: +65% Sugar: +59% Cotton: +54% +19% Coffee: +13% Steel +145% Corn _69% FAO Food Index +25% Cattle +21% Bitcoin +470% Stock Market +23% Home Values + 8% Hourly Wages +5% Money Supply Up +24%
This will continue because the Fed has the money printer on "full" - 40% of all dollars in circulation were "created" in 2020 - fact.
Debt capital costs less than all of the above items over the last 9 months. When inflation hits, the best strategy for operating businesses is to lock in future pricing for services and raw materials.
Many of my business owners have used affordable debt capital to make purchases of materials that are now worth way more that their cost to borrow those funds. When it's time to sell their finished product their margins will be higher.
For those reading this, if your business needs immediate capital to purchase materials or lock in pricing call me, I'll show you how to get it done.