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Starting And Growing A Small Business In The Midst Of Uncertainty


by Joseph Pascaretta, General Manager, Global Small Business at Dun & Bradstreet

Despite the uncertain economic situation in the United States, Americans are starting new businesses at the fastest rate in more than a decade, capitalizing on low interest rates and new market opportunities that have emerged since the pandemic shut down.

As hopeful entrepreneurs launch new businesses in one of the most volatile times in modern history – with the effects of COVID-19 dragging on and elections, social unrest, and trade wars adding to the uncertainty– it’s imperative they understand the financial considerations of starting and maintaining a business in the current environment.

New business owners need to consider not only what it will take to get their businesses up and running, but what it will take to keep them open. With some creativity and up-front planning, owners can help safeguard their business against cash flow shortages and even come out the other side of the pandemic thriving.

In times of uncertainty, a new business owner should carefully evaluate three things: business relationships, business credit, and how to fund current and future operations during a worst-case scenario.

Evaluate and diversify your business relationships.

As a new business owner, your relationships are the building blocks of your business. But like all company assets, these relationships need to be strategically evaluated to ensure they are beneficial. This includes your relationships with vendors, customers, and lenders. For example, as the COVID-19 pandemic continues to impact businesses around the world, you’ll want to take into account the potential supply chain disruptions that could arise in at-risk COVID regions. This may impact which vendors you choose for your operations.

As you build your customer base, beware of putting all your eggs in one basket, so to speak. It might be tempting to maintain the status quo when your business has one or two major clients who support your operations, or when all or most of your clients are in the same industry. However, as we’ve seen recently, if anything affected those major clients or that industry, it could cause extreme hardship for your company. Treat your client portfolio the same way you would your stock portfolio and diversify.

Finally, lenders will be a key component for most new businesses. Many small business owners fail to consider whether they are approaching the right lender. You can gather and prepare all the right things and still get denied financing because you didn’t go to the right lender for your specific business needs. Things like industry, line of business, or special financing type could impact the type of lender with which you should be working. The Small Business Administration (SBA) even has a lender matching tool to help you make your perfect match.

Understand and manage your business credit.

Many entrepreneurs start their businesses using personal credit, cash, or savings. In fact, I ran my first business mostly on savings and help from friends and family for the first few years. While that approach may work initially, eventually you will have to build business credit to continue to grow. Business credit can be important during situations that are unexpected, beyond our control, or both. If your company is unable to deliver to your clients and you need to take out a line of credit to assist with loss of income, a strong business credit profile can help. Strong business credit and a good history of making payments on time may help you negotiate or renegotiate terms with your creditors to help avoid late payments or qualify for a loan to keep your company operational.

Create an emergency plan and checklist.

As a private pilot, I was taught to use checklists for all elements of flying and found this methodology to be extremely useful in trying times. I recommend creating an emergency plan and checklist of all critical payments, costs and cash receivables. This will help you decide what costs you could forego for a period of time if needed and what you will have to continue to pay. Ideally, this should be done before you actually need it.

Finally, establish an emergency fund so you have a cushion until you can open another credit line or secure federal or state assistance. While building this fund may seem like an arduous task, especially when you’d rather be investing that money back in your business, it can be well worth it in the long run.

While opening a small business can be scary when we’re living in unprecedented times, it is possible to succeed. By being smart about your relationships, your employees, and your money, you’re setting the foundation for a successful business, even in the face of uncertainty.


Joseph Pascaretta is General Manager of Credibility at Dun & Bradstreet. In this role, Joseph is responsible for the strategy, product development, and sales efforts for the company’s Credibility business and small to mid-size business portfolio. He was recognized by Ernst & Young (EY) as Entrepreneur of the Year for Product Solutions in 2008 and The White House for Technology Advancement and Innovation in 2012.


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