Ellen McIlhenny - “The Smart and Savvy Exit – The Big Turnaround – Ambush and A Way Out?
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Inflation has not really been a major factor in the economy for many years. Unfortunately, many business owners today do not have a clear memory of the impact soaring inflation had on the business world in the late seventies. Jimmy Carter’s “malaise” economy sunk his presidency and to this day many view him as one of this country’s most ineffective presidents because of his inability to get control of inflation. In recent months we have seen rates of inflation that rival those of forty years ago.
We have a few factors that are contributing to this heat-up. First, and foremost is the impact the pandemic has had for the past eighteen months. Pent-up demand and a supply that has not yet caught up is a short-term natural effect. If all other factors were normal this could be short-lived as businesses open and supply catches up.
However, there are a couple of other things going on here that could turn this into a bigger and longer-term problem. First, the amount of money that the federal government has been pumping into the economy recently and the sign that they are not going to slow that trend anytime soon, along with years of federal reserve policy which has kept interest rates so low for so long. The fed is now indicating that it is time to allow some inflation until the economy stabilizes.
So why is all of this especially problematic for small businesses?
Just as the pandemic caused an unfair playing field when competing against big enterprises, the same is true when dealing with inflation. Larger companies can better absorb higher prices due to their larger financial reserves. Smaller businesses who live by the “Cash is King” mantra, are seeing their hard-earned cash buying less and less.
One of the best ways to limit the effects of inflation is to reduce expenses. Again, larger businesses have better leverage to negotiate deals with their vendors during tough economic times.
Now more than ever, small business owners need a community of like-minded people to help them wade through the unique challenges we face on a daily basis.
IBGR has a lot of exciting things happening during season 6. Be sure to become a part of our community so you can be a part of it. Thanks for listening.
Show Objectives - The Why
Today we will continue our discussion of my book The Big Turnaround: How bad management nearly destroyed an exceptional company. We will go in depth on one of the major tips that I cover throughout the book.
Today we will cover the chapters “Ambush” and “A Way Out?”. Then I’ll talk about another main take-away from the book, the importance of good communication.
Written by Ellen McIlhenny
Owner of CFO Plus Services, a Fractional CFO services firm which also offers Back Office Bookkeeping Services. Author of the business novel The Big Turnaround; How Bad Management Nearly Destroyed an Exceptional Company. Check it out at https://thebigturnaround.com
You can connect with Ellen on any of her #cfoplusservices platforms or firstname.lastname@example.org
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