There is a frightening truth that keeps each owner of a small business at night: they are always at a step of bankruptcy.
Each year, there is an event – this could be the loss of a key employee, a longtime supplier who goes bankrupt or the impact of a natural disaster – but there is a major upheaval that threatens to put them under.
This year, the event that will have an impact on the majority of small American companies is the threat of widespread prices.
Yes, prices on imported goods could cause a higher cost of certain companies. But this is not necessarily the problem. Companies often have changing costs, due to a wide variety of factors, and companies can generally navigate it.
The problem is the continuous uncertainty of the situation.
These changes in wide scanning policy linked to prices were accompanied by mixed messages. Business owners are left to request: which countries are affected? What is the new rate on my materials or my finished products? When does this come into force? Is it a short -term negotiation tactics in the long term?
Business owners are comfortable making difficult decisions. But faced with uncertainty, small businesses react by pressing the break button. What does that mean? These are icy hires. Job offers for open positions are under recovery and employees who are leaving are not replaced. They delay investments. In the short term, this means that they do not buy stocks. More importantly, they do not invest in the future, striking investments in technology, facilities and other infrastructures necessary to advance a business. These movements will slow sales and, more importantly, will hinder growth and long -term innovation.
For companies that have decided to be quick to act, efforts seem to be somewhat short, in the direction of re -enactment shipping across another country or adjusting the billing process with a supplier in the hope of reducing the impact of prices on their product. It is difficult to criticize a company that uses its time and resources to reduce costs, judge the system or hunts a flaw if it means that they are able to continue to make a profit. But this activity is not what makes America vibrate, because we have long been counting on small businesses to spend their time and resources to innovate in the fields of product development, process optimization and their sales expansion.
An action that I do not hear about is an interest in companies bringing manufacturing to the United States. As a manufacturer of domestic clothing, I have a ear close to the ground for the production needs and the capacity of our industry. This is incredibly different from the answer during the cocovated pandemic, when small and large companies have joined the idea of manufacturing in the United States, and many have made significant progress to do so, even if only for a short period. In my world of clothing manufacturing, prices will hit many companies hard. At the same time, I know three long -standing manufacturing operations which are likely to close their doors in the coming months due to the lack of request.
How can small businesses survive the uncertainty of prices?
- Create structured frames to guide the action. It is clear that it will be a situation that continues to evolve, therefore having a defined process to collect information, assess opportunities and make decisions will help navigate in progress. Develop jobs, purchase, pricing and other important commercial operations, as well as key measures to keep them online. If the request for your product slows down, be ready to withdraw inventory purchases and sales staff. If the costs increase, have a plan to adjust the price and increase value to customers.
- Find creative ways to work with others. The collaboration efforts from the cocovated pandemic were not only inspired, they played a decisive role in the survival of so many American companies. Partnership with a neighbor, a supplier or even a competitor can add significant value and stability to a company.
- Stay vigilant and do not lose the concentration. The widespread prices can be the historic event for a company, but similar to the cocovio pandemic, the real test will be done in the three to four years depending on the initial event, because the greatest economy will undoubtedly see certain seismic changes in small businesses. In the meantime, stay on your customer, product and business.
- Explore domestic options. For most industries, it is unlikely that a business can eliminate dependence on manufacturing abroad overnight. But even small businesses can start to diversify their supply chain to reduce their exposure to potential prices or other events that could be catastrophic for a company.
American business owners are resilient and many will survive these uncertain times. But I don’t know a single person who has a business simply because she wants to survive. They want to prosper. Small businesses are the backbone of the American economy and will not be able to continue to add value by innovation, job creation and community participation only once the uncertainty about generalized rates has settled.
The opinions expressed in the Fortune.com comments are only the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
Find out more:
- The pursuit of “Lean” operations left the companies mercilessly exposed to chaos of prices
- Why did I sold my family’s business to my century to my employees
- Prices, AI and a broken pipeline: the person’s work crisis is not ready for
This story was initially presented on Fortune.com
