Council Post: Protecting Your Business And Your Well-Being In Stressful Times

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Jenn Flynn leads Capital One Small Business Bank and is a highly respected corporate finance executive with 20+ years of experience.

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Significant economic events can have a disproportionately negative effect on small businesses. We saw this during the financial crisis in 2008 when small businesses had to cut 8.7 million jobs in two years, a 60% drop in job creation. In the years that followed, the small-business community bounced back and was responsible for creating 62% of all new jobs—a testament to their resilience and role as critical drivers of job growth for local economies.

Since then, there have been more challenges, though none quite as disruptive to business conditions as the Covid-19 pandemic. To stay afloat during the last two years, many small businesses had to pivot their operations and shift to a virtual and socially distanced environment—an adjustment that unsettled an already delicate work-life balance for most business owners.

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Recent challenges stemming from labor shortages and inflation have tested that balance even more. The latest consumer price index reached 9.1% in the year through June, adding to growing fears among business owners that a recession is possible in the next year. And a recent survey from Capital One Business and the NextGen Chamber of Commerce found that inflation has become the number one concern among business owners with nearly a quarter having preemptively raised prices to mitigate financial risk.

While this uncertain economic environment may feel like another hurdle for small-business owners, the vast majority of business owners remain optimistic and are energized to grow their businesses.

Mitigating Inflation

According to the survey, many business owners have already taken steps to mitigate the potentially negative impacts of inflation, including building up their cash reserves. I recommend business owners contribute a manageable percentage of their earnings to a business savings account as a small, effective way to safeguard their businesses. A business savings account provides peace of mind during emergencies and can help to cover unforeseen expenses. An FDIC-insured financial institution is a safe place to hold your investment and take advantage of rising rates. Alternatively, many small-business owners are locking in loans when rates are low.

Developing a cash flow management plan is essential for helping business owners understand how much money is coming in and out. This process will also highlight any potential shortfalls and empower business owners to eliminate unnecessary spending.

Some business owners are also purchasing inventory in advance to avoid inflation peaks: locking in long-term purchasing contracts when rates are low and building flexibility into their own pricing.

Embracing Digital Tools

The Capital One Business survey found that 88% of business owner believe technology helps them run their business better. This is a striking number, and it’s in line with trends I am seeing in the market. I’ve seen this come to life firsthand for our business banking customers. Pre-pandemic, many of our interactions were in person. Now, they have embraced online banking and interact with our bankers via Zoom without losing that trusted business relationship.

For some businesses, pivoting to digital tools or e-commerce was necessary to stay in business these last two years. A level of investment will be necessary to sustain and keep pace with this digital trend, which is also causing some concern for a small percentage of business owners. As McKinsey shares in their report on business adoption of digital technologies, Covid-19 has “transformed business forever” and we are seeing this trend continue.

Navigating The Labor Market

It’s no secret that the tight labor market is holding many businesses back. I am seeing optimization from business owners as it relates to hiring and retention, and I think there’s a cause for optimization here. Business owners have gotten creative: They are prioritizing their mission as a way to attract job seekers and motivate their teams. They are also embracing the benefits of remote-work options. By remaining open to these new options, business owners are staying nimble and even hiring employees from outside their geographic footprint.

Prioritizing Well-Being

In addition to the stressors of the pandemic that we all have felt, business owners have managed labor shortages, government shut-downs, supply chain disruption and volatile macroeconomic conditions. As I previously shared, just when it starts to feel like things are settling into a new normal, unforeseen stressors appear for business owners.

The Capital One Business survey data confirms what I’ve been hearing in conversations with business owners—many are still struggling with burnout and exhaustion. I empathize with business owners and know how challenging it is to step away. During stressful times, it’s critical to look after your well-being, both for yourself and your business. One encouraging byproduct of the past few years’ challenges has been a mindset shift from thinking of self-care as a luxury to an essential, positive contributor to our well-being. And this shift is happening at all levels: Recent research from Deloitte found that 68% of employees surveyed and 81% of the C-suite say that improving their well-being is more important than advancing their careers.

I’m always on the lookout for new habits or rituals to help me set healthy boundaries between work and life, and enable my team to prioritize their own well-being. Whether it’s empowering yourself to say “no,” scheduling time to disconnect or outsourcing more tasks, there are small changes to your routine that can add up to a big difference.

No doubt, it has been a challenging couple of years. Most business owners tell me they feel just as, if not more, motivated to grow their business today than they did before the pandemic, which is encouraging. I am often asked for my opinion on the consistent theme of optimization that we hear from business owners. In a way, I believe business owners feel they have weathered the eye of the storm during the pandemic and are ready to tackle any challenge that comes up next. This optimization, combined with taking a few proactive steps, will go a long way in weathering whatever comes next for business owners.


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