Two seconds on social media or the television is enough to find heart wrenching images of the assault of democracy in the Ukraine. Our prayers are with the families and freedom fighters that are standing up to violent aggression in their homeland. This is a human story, but also has economic consequences for business owners to carefully pay attention to.
Yes, the stock market has been fluctuating wildly. That is one noticeable economic barometer. What underlies this is the potential of growing headwinds to the economy and its small businesses. Oil prices have skyrocketed, meaning we all pay more at the pump. But oil is involved in so much more than just fueling our cars. Air travel could get more expensive, and the cost of shipping goods, which has already dramatically gone up in the last months, could increase even further. Oil is also a key ingredient in so many products from plastics to packaging. It almost surely has a bearing on the products you sell. Rising wages may not slow either. Utility costs and commodity prices will also be impacted. And as this all compounds the inflation problem.
There has also been talks of additional sanctions. Because of how the global economy is so coupled together, these sanctions could have a double edge sword. Their impact on Europe in particular, which depends on Russia for a significant amount of oil and gas, could cascade indirectly to the United States, creating even more disruption.
So as a business owner, what do you do?
1. First, understand the potential risks to your business. Pay close attention to current events and their byproducts, including the price of oil. New sources cannot be started up overnight, and of course large suppliers like Saudi Arabia could pump more oil into the system thereby lowering oil prices. But in the short term, the oil markets will be disruptive. The volatility of oil prices has long been a proverbial canary in the coal mine, so as this continues, business owners should be on high alert.
2. These are uncertain times, there is no reason to anticipate long term headwinds, but it may make sense to re-assess certain initiatives or growth plans short term. Perhaps even just a pause or tempering of expectations is warranted. This is unique to each business, but all businesses should at least be asking questions internally on any potential negative impacts.
3. Don’t operate out of fear. Some businesses owners are just exhausted and even paralyzed after battling Covid, inflation, and now the effect of a war oversees. Educated, thoughtful action is critical. The American entrepreneur has survived recessions, the Cold War, and commodity crises to name a few. Stay strong and re-assure your teams.
These are sad, troubling times without question. We must never forget - democracy will win, capitalism will win, and small business will win. You are the driver of the American dream that countries like Ukraine are fighting so hard to model after.