5 Reasons to Get Your Business House In Order Right Now 🧹🏠 🧹
Patricia Hammond 
Preparing for the (inevitable) chaos...
Once upon a time, a sole proprietor in Chicago didn’t have to worry about a winter storm in Texas or a war in eastern Europe. They would empathize and make a donation to the Red Cross, but it didn’t really affect their business because everything was regional.
Technology changed that.
Computers, the internet, and all those cool tools that connect us opened a new world of opportunity for small business owners.
Suddenly, we could source cheaper products in Asia, sell to customers in England, and remote work with people in Australia.
It was incredible.
Now it’s scary.
Instead of relying solely on local and regional resources, we depend on a world outside of our control.
With that in mind, I’ve put together five reasons you need to put your business house in order right now.
1. Unstable energy prices
Five months after Russia’s invasion of the Ukraine, the global energy markets are still out of control.
The cost of gasoline has dropped slightly over the last few weeks, but it’s nowhere near the $2.249 price we enjoyed in January.
The rising price of natural gas has caused electric companies throughout the country to seek, and receive, staggering rate increases — 75% - 100% in some places, and home heating oil costs are so uncertain, residents in many areas are being told to start saving now.
These massive price spikes affect everything from production to delivery and are causing the cost of almost all goods and service to increase.
To put it another way, even if the cost of energy doesn’t affect the price of your services, your customers are likely to have a lot less disposable income to buy them.
2. Weather
A hundred years ago, you didn’t have to worry too much about the weather outside your own region. Today, hurricanes, droughts, freezes, and wildfires can have devastating effects on industries outside your local area.
These types of events affect everyone and they seem to happen every day.
For example, a winter storm caused a power failure in Texas, which led to a foam shortage that resulted in decreased or delayed production of cars, furniture, boats, and every other product that uses some kind of foam. (What’s Causing the Spray Foam Material Shortage?)
It’s been a year and a half since the ice storm and there is still a 6-12 month delay on new furniture orders.
3. Interest Rates & Inflation
Are your revenues keeping pace with rising interest rates and the increased cost of goods and services? (See the latest CPI info from the US Bureau of Labor Statistics) The dollar doesn’t buy as much these days, and that means you need to increase sales and reduce costs to stay afloat. And you need to get moving on that now, before things become critical.
4. Flu & The Neverending COVID-19 Pandemic
After two years of catering to the dictates of COVID-19, even the most diehard hibernators are ready to be social. While it’s great to see a return to some semblance of normal, you need to be prepared. Between COVID-19’s new immune evasive mutations and the return of the flu, it’s likely we’ll see localized surges of both as we move into fall.
How will this affect your business?
Do you have someone to cover for you if you’re out sick for two weeks?
What happens if the factory that makes the widget you need for your product shuts down for a few days for a deep cleaning?
What can you do to prepare for these possibilities?
5. It’s your job.
It doesn’t matter if you’re a plumber, chiropractor, or custom cabinet maker. Your job as the CEO is to put your business in the best position to make money.
Take a few minutes to review your current status. Run a few financial reports to make sure your receivables are current and work with your accountant to see which products and customers make you the most money.
Use this information to make informed decisions about changing suppliers, dropping or adding products, and moving into new markets.
Some of these things may seem like they’re out of touch with the average micro-business owner, but when you drill down, they affect almost every business. Even online-only businesses.
Categories: newsletter, planning, preparation, recession-proof, succeed