My column in this week’s Tennessean offers some tips on how small businesses can best prepare for the possible tough economic times ahead. This will be a new experience for most entrepreneurs in America thanks to the long economic expansion we have enjoyed for most of the past twenty years.
Unlike the last period of stagflation in the late 1970s, we are now in an entrepreneurial economy — 50 cents of every dollar in the economy is generated by small businesses.
Small businesses are always tight on cash flow. And if their inputs of raw materials and other direct operating expenses go up, they may not be able to pass along these costs quickly enough to keep their cash flow positive. And they certainly don’t have large cash reserves to ride out the recession that is part of stagflation.