It seems that we are seeing the light at the end of the tunnel with regards to the current COVID-19 pandemic, which has organizations of all sizes building resiliency and future-proofing their processes. However, while many remain positive that growth is coming, small businesses are still struggling with challenges that stand in the way of recovery.
At the onset of the pandemic, many small businesses were forced to operate on a skeleton crew, furlough employees, or even let them go altogether to remain open. This impacted restaurants and bars in particular, and that continued as more federal financial aid was released for unemployment benefits.
Now that lockdown orders have been largely lifted and in-person dining and shopping have resumed near or at pre-pandemic capacity, there are again positions to be filled and financial support to do so — but no one to fill them. Federal unemployment aid will continue through the summer and that will discourage those who wish to stay home and avoid exposure to the coronavirus from looking for a new job.
The additional unemployment aid flowing through the country has also contributed to potential wage escalation. Jobs with median annual incomes of $25,000-$30,000 pay less than what job seekers could earn from aid (versus taking a position). While this seems like a reasonable salary for a position in a small business, it will take a bit more to attract applicants that have the talent needed to excel in the role. Offering higher wages isn’t ideal for small businesses in the best of times, but it could be near-impossible for those who are already tight on resources.
If all of this wasn’t presenting enough of a hill to climb towards recovery, supply chain disruptions continue to cause a steep rise in the cost of steel, lumber, and plastic. This directly impacts manufacturing, but it also creates much higher costs for expanding a business’s physical footprint with newly constructed warehouses and distribution centers.
So what can a business do to conquer these challenges? First and foremost, create a culture that makes your employees want to stick around. Knowing that you have a core staff of competent, talented employees can give you the peace of mind you need as an owner to attend to high-value work and other recovery plans. If you can’t raise wages across the board, look for ways to add incentives to benefits plans; think about 401(k) options or performance bonuses.
Second to the relationships with your employees are the connections you have with suppliers and vendors. Nurture those connections, collaborate closely to overcome supply chain disruptions, and stay on their good side. This includes paying your bills and invoices on time, every time. Rely on these relationships to build up an inventory of items that may be in short supply or face high customer demand. If you are facing longer lead times for deliveries, be transparent and let everyone know, including your customers.
It’s never a fun discussion to be a part of as a business owner or an entrepreneur, but all signs point to impending economic inflation. An overheating economy could lead to a stock-market pull-back, and to prevent this downward spiral, the Federal Reserve will step in and raise interest rates. If businesses don’t prepare now, this could be another dire crisis after being in a pandemic for over a year.
Now is not the time to take your foot off the gas pedal. If you need more support in planning for inflation or post-pandemic recovery, we have several ways to help. From consulting to coaching, and even peer advisory groups, our team will help you find the resources, insight, and experience you need to grow and thrive despite what’s happening in the world around you.
We use decades of business experience to guide owners towards the fulfillment of their visions. For over ten years we have helped owners navigate high-pressure situations and potential pitfalls, all to come out better than ever on the other side. Are you ready to dissolve your barriers, commit to executing and achieving your vision? Contact us today and we can get started.