If there is something we have learned collectively over the past 2 years is that uncertainty is somewhat inevitable. Business owners have faced unprecedented challenges, including health and wellness concerns, government compliance issues, labor challenges and a wildly unpredictable economy. From a good news perspective, there are signs that aspects of our lives are progressing to some semblance of pre-COVID normalcy. Unfortunately, news about global economic conditions remains ominous, and the future is shrouded in uncertainty.
This begs the question…what actions should be taken by business owners with conditions as unsettled as they currently stand? Perhaps a start with what we recognize are the major uncertain issues is in order.
Inflation is a major concern, according to many recent national polls seeking to better understand the national mindset. The most recent Consumer Price Index figure of a 9.1% increase is the highest since 1981. The effects of inflation are not only evident in fuel and food prices, but also in rent, commodities, labor and logistics. It is the most pervasive and potentially destructive economic indicator that consumers and business owners are being forced to address.
Labor issues remain a major source of unease, especially for hospitality and service sector businesses. Finding workers has been a significant challenge. The good news on that score is that consumer spending, up to this point, has been strong, hence the need for labor to meet consumer demand. The most recent US Department of Labor reporting indicates that unemployment remains low, and the economy continues to add jobs. There are some reports beginning to emerge, however, that the trend may be transitioning, as numbers of people exiting the workforce appear to be on the rise, and with potential economic tightening, the number of available jobs may contract if consumer spending also tightens.
Supply chain issues remain a challenge facing many small business owners. We are continually hearing from entrepreneurs of the complications they experience as they continue to try to meet consumer needs and profitability goals when faced with the inability to acquire needed inputs for their businesses.
These are among the many complex and nuanced difficulties gnawing at the minds of the small businesses we work with every day. In some cases, it is difficult to forecast with any certainty what the next 12-24 months may look like economically. So what things should a business owner do to help mitigate the challenging times we expect to face in the near term?
The last recommendation I would like to suggest is to communicate with your circle of advisors. Consult with your accountants, attorneys, trusted industry partners or mentors and discuss your environment and your options. Our advisors are also here to help. We can gather research, assist with developing cash flow projections and even a full financial health analysis of your business. Our team can facilitate the process by which entrepreneurs can make informed decisions and take informed action, because information is the greatest tool to navigating uncertainty.
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Article published in the CNY Business Journal on July 29, 2022
Bob Griffin is the Regional Director at the Small Business Development Center located at Onondaga Community College. Contact him at firstname.lastname@example.org
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