We’re not ‘completely out of the (pandemic) woods’
Businesses face mountains of debt, staffing issues and skyrocketing inflation, chamber audience hears
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Hey there, time traveller!
This article was published 25/02/2022 (219 days ago), so information in it may no longer be current.
Planning ahead and following a conservative budget is key to many businesses’ survival, attendees of a Winnipeg Chamber of Commerce session heard Thursday.
“We’ve just come through two years of some of the toughest days in many generations,” said Loren Remillard, the chamber’s president, in an interview pre-meeting.
The province’s public health restrictions are loosening, allowing public-facing businesses to return to pre-pandemic-like operations. However, Remillard counts himself optimistic with “an asterisk”.
“I harken back to the Great Depression (as) the last time, I think, the world has experienced such an economic hit like we’ve just gone through,” he said. “And, there’s no assurances that we’re completely out of the woods.”
Even if the pandemic recedes to an endemic state, entrepreneurs face mountainous amounts of debt, restricted staffing levels and skyrocketing inflation.
“If inflation is left unchecked, it may cause a prolonged period of economic hardship,” Remillard said. “Consumer confidence (could) perhaps take a bit of a step back, which would be absolutely detrimental to so many businesses that really need consumers to come back en masse.”
Companies’ operating costs have shot up with the price of goods and shipping. Last week, Statistics Canada announced the country’s year-over-year inflation surpassed five per cent for the first time in three decades.
“Every conversation I have, inflation factors in, regardless of how well the company is performing,” Remillard said.
For entrepreneurs, the coming months and year will be a balancing act between managing the rising costs of goods and labour while keeping prices competitive, Remillard said.
“The ones that are able to manage it will be successful, but some just will not be able to,” he said.
The chamber held a finance forum Thursday highlighting tips for companies to balance their books.
“As small business owners, we are forced to reimagine how we operate and think about our cash flow on a daily basis, as things are changing by the minute,” said Kristine Tubiera, co-host of the chat and founder of LMVA Consulting.
Jerod Rathbone, a business account manager for RBC, preached planning when he took the virtual stage.
“The last thing we want to do is pack on more stress,” Rathbone said. “You can reduce your stress and anxiety by having more detailed or better structured plans.”
It begins with writing down goals — on revenue, scale or whatever the entrepreneur chooses — and using those goals as targets to make a defined budget.
Including inflation in budgets is critical right now, as is having multiple suppliers on hand, should one fall through, Rathbone said.
Consistently re-evaluating goals and finances — and planning with a conservative focus — will create a level of “conviction, comfort or confidence,” Rathbone said.
“(I’m) really encouraged to hear you come back to the words comfort and confidence so frequently because I think that these are things small business owners are looking for,” said Larissa Peck, session co-host and co-founder of Tandem Collaborative.
Control was a theme of Thursday’s chat. Entrepreneurs can’t control everything, including customers’ decisions, but they can tailor their company’s messaging, which should be done, Rathbone said.
He encouraged seeking advice from professionals, including bankers — “don’t look to reinvent the wheel,” he said — and to view lines of credit as a privilege, not a right.
“You kind of need to get it when you don’t need it to then have it when you do,” Rathbone said. “(We’ve) had clients coming to us saying ‘Things are going south; I now need flexibility or access to capital’… They hadn’t prepared their business in a way to be able to support it, and that’s a really tough conversation.”
Talking to financial institutions early and often is important, Rathbone said.
The Winnipeg Chamber of Commerce surveyed its members last month to check the city’s business pulse. Fifty-five per cent said they were doing the same or worse than last year, according to Remillard. Twenty per cent signalled they were facing tougher times than the previous quarter.
Fifty-six per cent were looking for more sector support from government.
Gabby is a big fan of people, writing and learning. She graduated from Red River College’s Creative Communications program in the spring of 2020.