Setting the Stage
Small businesses are navigating one of the most complex economic environments in years. Rising costs, global uncertainty, and shifting demand are forcing owners to rethink how they operate—and what comes next.
Small business owners don’t experience inflation as a statistic—they feel it in real time. From higher fuel costs to rising supplier prices, the impact shows up in thinner margins and tougher decisions about how to operate day-to-day.
I spoke with Aditya Narula, SVP and GM of Lending and Credit at Bluevine, about how rising costs are reshaping small business operations—and what owners can do to stay ahead of the pressure.
Rieva Lesonsky: Inflation has ticked back up to 3.3%, with energy prices playing a major role. What does that actually mean for small business owners on a day-to-day basis?
Aditya Narula: For a small business owner, 3.3% isn’t just a headline number; it’s a squeeze on the float. Day-to-day, this might mean your morning fuel run is now $5 more, your utility bill is up 15%, and your supplier is adding temporary surcharges that never seem to go away. It means the cash you have in the bank today literally buys less inventory tomorrow. Owners are forced to spend more time reviewing their bank accounts and less time serving customers.
Lesonsky: You’ve said surging energy prices are hitting service businesses particularly hard. Why are these businesses more vulnerable—and what does that look like in practice?
Narula: Service businesses are uniquely vulnerable because their revenue is tethered to movement, making energy a direct variable cost that can’t be easily hedged like it is by larger corporations. This means a sudden spike at the pump can instantly turn a profitable service route into a break-even day, forcing owners to decide between firing loyal but distant customers or absorbing the loss. Real-time cash flow visibility becomes the only way to catch margin erosion before it threatens the business’s viability.
Lesonsky: At what point do rising costs stop being something businesses can absorb and start forcing real operational decisions?
Narula: The breaking point is when your net profit margin is consistently thinner than your monthly revenue volatility. If your margin is 10% but your costs are fluctuating by 12% due to energy swings, you’re no longer absorbing costs; you’re subsidizing your customers. That’s when you stop thinking about belt-tightening and start making hard calls, including cutting low-margin service routes, reducing headcount, or implementing mandatory delivery fees.
Lesonsky: How should small business owners think about raising prices in this environment—especially when customers are already feeling stretched?
Narula: Transparency is your best defense. Instead of a silent, sweeping price hike, consider a transparent surcharge tied to specific input, like a fuel recovery fee. Customers are feeling stretched, but they also value the businesses they rely on. If you explain that $X increase is what it takes to maintain the quality they expect, they are often more resilient than you’d think. The risk of losing a few price-sensitive customers is usually lower than the risk of running your business into the ground.
Lesonsky: You believe real-time visibility into cash flow is critical. What does that actually mean for a small business owner—and how can they improve it?
Narula: Real-time visibility means moving beyond bank-balance accounting, where an owner simply checks their total cash and guesses whether they can afford next week’s expenses. It is the ability to see a live integration of your incoming receivables and outgoing payables so you can identify a cash crunch before it happens. Owners should move away from manual spreadsheets and adopt automated tools that categorize spending instantly.
By seeing exactly how much working capital is available after those obligations are met, an owner can make informed, split-second decisions on whether to take on a new project or hold back on a purchase.
Lesonsky: What are some immediate steps small businesses can take to protect their margins right now?
Narula: To protect margins immediately, owners should audit their recurring expenses and cut any subscriptions or services that haven’t provided clear value in the past 90 days. Businesses should look for ways to lock in costs where possible, whether by negotiating fixed-rate contracts with key suppliers or optimizing service routes to reduce the total mileage and fuel consumption required to generate revenue.
Lesonsky: Are there warning signs that a business is under more financial pressure than the owner realizes?
Narula: The biggest red flag is an increase in “Days Sales Outstanding” (DSO). If it’s taking your customers five days longer to pay you than it did six months ago, that’s a sign the liquidity crunch is moving up the chain. Another sign is finding yourself using your personal credit card for business emergencies more than once a quarter. That’s not a one-off; it’s a structural cash flow gap.
Lesonsky: If energy prices remain elevated, how will that impact hiring, investment, or growth plans for small businesses?
Narula: If energy prices stay high, expect a pivot from growth-at-all-costs to efficient growth. Businesses will hesitate to buy a second van or open a second location if utility and transportation costs are unpredictable.
We’ll likely see more investment in automation and green retrofitting, not just for the planet, but as a hard-nosed financial hedge to make energy a fixed cost rather than a volatile one.
Lesonsky: What’s the one financial habit small business owners should prioritize right now to stay resilient?
Narula: Spend 20 minutes weekly reviewing your cash flow forecast for the next 30 days. Don’t wait for the end of the month or a call from your accountant. In a high-inflation, high-energy environment, the business owner who wins is the one who sees the gap coming three weeks out and adjusts their pricing or spending before the gap actually hits.
My Takeaway: What stands out here is how quickly rising costs can shift from manageable to disruptive. Inflation doesn’t just erode margins—it forces real-time decisions about pricing, customers, and operations.
For small business owners, the takeaway is clear: the more visibility you have into your cash flow, the better positioned you are to respond before small pressures turn into bigger problems.
Rieva Lesonsky is the founder of Small Business Currents, a content company focusing on small businesses and entrepreneurship. You can find her on Twitter @Rieva, Bluesky @Rieva.bsky.social, and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
Photo courtesy Getty Images for Unsplash+
