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The Fall of Rupee and How Is It Affecting Your Business in India

The Fall of Rupee

Even if you are not well versed with all the economic paradigm shifts all over the world, yet you are definitely aware of the news of fall of rupee. The depreciation which is more than 25% compared to the US dollars is going to have its serious impact on Indian economy. When the value has gone down to 70 rupees one dollar, it is presumed that there will be a slight recovery at the end of the year. However, this fluctuation is never really great news for any business. While dealing with such economic pressure, the small and medium-sized businesses are struggling quite a lot to survive the tougher times ahead.

Now, if you are running a business, it is necessary for you to know how the current predicament can affect your business. Take a look at the following points to know more.

Slow Down in Business

For running a business, it is necessary that you have a complete strategy to convert your potential leads in revenue. However, when the value of rupees is going down, getting more consumers on board is becoming increasingly difficult for any company. When there is already a scarcity in the market in terms of capital, businesses are adopting the strategy of slowing down, wait and watch. This policy, though saving businesses from imminent loss, yet is not very fruitful for the long run. As a result, the market is quickly reaching a standstill situation which is harmful to any business irrespective of the size or turnover.

Increasing Cost of Inputs

Another adverse effect of rupees falling is that the input costs across categories are increasing rapidly. As a result, when you are trying to strike a balance between your costs and profits, you will realize how much your cost sheet is getting strained. Eventually, this will affect your gross and net profit. The most unfortunate part of this is that you will never be able to control the cost as this is the impact of the economy of your whole country and as an individual, it is not possible for you to recover.

Affected Earnings in Business

 Now, due to these aforementioned predicaments, you might find that your earnings will get affected. The fall of rupees will result in inflation. As a result, you will see a negative effect on your budgeted earnings. To deal with a situation like this, you have to take a hard look at your expenses and find out what you can do to manage your expenses and maintain it in different categories like salaries, establishment, stationary and so on.

Difficulty in Borrowing Money

When the fall of rupees is making things difficult for business, it is changing the scenario in the lending market too. When RBI is coming up with stricter policies for loans and lending, it is becoming quite difficult for businesses so that to lend money for managing requirements.

3 Steps to Manage Businesses During these Tough Times

  • Follow cost-effective steps so that you can manage your expenses. Find out the areas where you can control the expenses and make sure that you are being consistent in it. Control your printing costs, establishment expenses and so on so that your cost sheet doesn’t spike up too soon.
  • Make sure that you are getting paid on time. When your debtors are not paying you back at the right time, it is going to affect your cash flow within the business. Make sure that you are recovering all your money from the market on time.

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