In today’s era of globalization, small and medium sized businesses have been credited with significantly helping the economy. SME’s have contributed to over 50% of the GDP and provided over 60% of the total employment in so-called developed, high income countries. As a result, world events have taken their toll on small and medium sized enterprises.
Small businesses were the hardest hit, by events like rising oil prices as well as sharp rise in price of gas, following unrest in countries like Tunisia, Egypt, and Libya. This has affected shipping orders, business flights, and every day travel expenses. In fact, smaller companies find it difficult to survive in the new cost structure.
Small enterprises are in constant requirement of funding, for which they would require to prove their effectiveness. Costs, sales and profits are the three things which financial institutions take into consideration before lending funds to budding entrepreneurs. So a person willing to join the transportation business would find it very difficult to secure capital.
The recent developmental crisis which hit Arab was due to the rising fuel prices, even when the economy was recovering from the 2008 main street recession. In fact rising fuel prices have been a major cause of the slowdown economy.
Besides affecting shipping orders, business flights, and every day travel expenses, rising fuel prices will have an impact on the consumers who will have less disposable income to spend. This would terribly affect small businesses such as restaurants, coffee shops, and purveyors of retail goods, service providers, such as nail salons, landscapers etc. As customers remain strapped for cash, these entrepreneurs would witness drop in revenues.
Since, small businesses account for about 70% of the new jobs in the economy; they need to improve their financial situation which has been devastated by high fuel cost. They can improve their financial situation through the under mentioned way’s.
- Schedule con calls, video conferencing instead of flying over to meet the client’s.
- Prefer using electronic and invoicing payment methods.
- Reduce the use of paper by storing data electronically.
- Allow work from home option
By leveraging technology you cannot just improve the financial condition of your organization but would also contribute to a greener environment.
This article was submitted by Rohit Arora, co-founder of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to