Inflation, COVID, and how it can impact a small business

Though Alberta is moving away from the public health measures of the last two years, the increased cost of living is causing businesses to face new challenges as the province opens up.

Legal expert at Field Law, Lyndon Thiessen says that entrepreneurs are facing hurdles of a legal nature.

“[There is] increased volatility in the marketplace related to supply chain issues, and the financial stability of customers and suppliers alike,” he says, adding that workforce issues relating to supply, inflation, as well as the cost of carrying on with business, might also be a struggle.

However, Thiessen says while inflation and the lingering effects of COVID might be out of the control of business owners, there are things they can control if they take a proactive approach.

“Businesses can proactively review their corporate structure, tax efficiency, significant asset protection, and key internal or external relationships to determine whether their interests are adequately protected from a legal perspective,” he says.

Taking a proactive approach to these controls, Thiessen says, almost always results in better conditions for business owners to navigate through economic realities.

“These controls and even the review and discussion of these issues gives entrepreneurs knowledge and awareness of the same,” he says. “Which in turn allows them to address these issues.”

At the same time, Thiessen says there isn’t one magic solution, and that how a business owner addresses the issues they’re facing depends on the risk being addressed.

In other words, he recommends finding the right solution specific to a person’s business and that business’s challenges.

“The best solution to deal with any issue is fact and situation-dependent,” he says. “There is no ‘one size fits all’ – instead it is a dynamic process with the entrepreneur working closely together with their advisors to plan for risks.”

While Thiessen expects most business owners can identify the issues they’re facing, he feels it’s important for owners to understand that there is support and information available to help them during these tough times.

“Entrepreneurs are vital to our economy and community and the survival of their businesses is vital to all of us in many respects,” he says. “The events of the last few years have affected and tested many of our collective reserves and entrepreneurs are no different and need our support.”