December 07, 2023
As the festive season is approaching, we are all invested in preparation to make the most out of these times. We have waited a whole year for this and it is worth every celebration but if you are an entrepreneur, you should take this time to build your business.
Over the last one and a half years, the prices have been rising for everything everywhere. Moreover, if we talk about the last five months in the UK, prices started to slow down. It is the best time to start your business when inflation is slowing down. With a strategy, you can create a favourable environment for your business. Whether you want a new business or want to add something new to your existing business, it is the best time.
What is the Buzz with Inflation Decline?
During the last five months in the UK economy, stats indicated that the inflation is not increasing like it was used to. According to a prominent measure of inflation, the Consumer Price Index (CPI) was at 4.6% in the last 12 months. This rate is the lowest in the past two years, going back to 2021. When we talk about the all-time numbers, it is the biggest single drop since 1992.
To be more precise and clear, you should know that this drop doesn't mean that prices will keep falling. These stats indicate that the prices are not rising as quickly as it has been for so many years. It is great news for every type of business and the best for the businesses that are aiming to start it from scratch. The government of the UK has also set a target to reduce inflation and cut it to half. It can also be considered a great sign for starting a business.
If we talk about more numbers, the government is aiming to keep inflation at around 2%. As inflation is stated at the same rate, the Bank of England is also keeping the base rate at 5.25% and it will remain the same going into 2024.
Reasons Behind Inflation Drop in the UK
As an entrepreneur, you should be curious about how prices are declining and whether now is the appropriate time to make investments. Here are some key reasons behind this major drop in inflation:
- Energy costs dropped in October of this year, making gas and electricity more affordable than ever. Gas prices fell around 31% and electricity prices fell 15.6% in the UK.
- Food prices remained unchanged in the last year.
- The Bank of England is raising interest rates and keeping it the same way to balance the economy.
- After the COVID pandemic, the global supply chain is softening and this normalisation is helping in limiting inflation.
- The government is helping by reducing inflation with various efforts.
How to Build Your Business During Inflation Decline
Inflation is a great help if you want to build your business but it is not the ultimate solution. You need to do your research and read the market deeper to make your business a sure success. Business growth depends on competition and how you provide value to your potential customers.
The per capita income is also expected to rise with this inflation decline. It is also a great factor to grow your business as people will be more flexible in spending now. If you're looking to start a business during a period of low inflation, you should consider these points and start your business with unique strategies:
Leverage cost efficiency
During inflation decline, the cost of raw materials is expected to remain low. You can take advantage of this and get borrowing at a lower cost.
Research about your industry
Get to know about the trends and relevancy in your preferred niche to grow your business. As the inflation rate decreases, many top names in your names can introduce new schemes.
Invest in new approaches
When you have a new line of products, you can boost your presence in the online space. Investing in innovation with emerging needs can also stand out in the competitive market.
Build long-term relationships
Whether it is suppliers, manufacturers, or customers, you should put effort into building relationships. Connections can help your business go big and you should have a strategy for it to get started.
Flexible Pricing Strategies
You should develop strategies based on economic conditions and future changes. You should consider every aspect and make your choices to ensure you remain sound in the market.
Make a financial strategy
There can be issues with the cash flow and interest rate of your business. You should allocate resources carefully and make arrangements to make a solid strategy during inflation times when there can be uncertainty.
Monitor Economic Indicators
You should keep monitoring what is happening in the market to stay updated with the trends. With a solid knowledge of inflation rate, interest rate, and other factors, you can adjust your business growth.
Leverage Advanced Approach for Digital Solutions
If you want to grow in the digital world in times when conditions are suitable financially, you should contact us. While getting the best solutions, you can ensure you get the development within your budget. Whether you want an eCommerce platform or CRM implementation, our experts can help.
If you want to build an online platform for your business or want to work on your existing one, there is no better name than Dotsquares. Being the top IT service provider in the UK, we have worked with countless projects across industries. Contact us and we will build you a robust platform to help you navigate in the competitive digital space.
