When a Pandemic Meets a War: The Unexpected Combo That’s Shocking Small Businesses
Once the world was still groaning from COVID‑19, businesses were slowly breathing a sigh of relief. Only now the headlines are all about Russia’s invasion of Ukraine, and the economy is looking like a roller coaster that’s left the track.
Oil Prices Gone Wild
Oil has crashed past the $100 mark for the first time since 2014—yes, that’s a whole lot of money. While Britain isn’t the biggest oil‑buyer from Russia, many European towns and cities depend strongly on it. The ripple effect? Natural gas for the UK feels the squeeze, too.
It’s unclear whether this price spike will stay in place or just be a one‑off flare‑up. But one thing’s for sure: when energy costs climb, the entire economy is thrown into the deep end.
SMEs: The Real Pain‑Points
Picture the biggest corporations making multi‑year deals with energy suppliers. Now flip the script to our smaller firms. They’re stuck with the same “ever‑increasing” rates because their negotiating power is basically non‑existent.
For them, a tiny uptick in gas or electricity can turn a small profit into a money‑losing nightmare.
Inflation: The 30‑Year Rebound
Even before the conflict, the UK’s inflation was already at its tallest peak in 30 years! Now the war’s additional pushes could slam prices even higher—wiping out real income and leaping costs for businesses.
When consumers are wary, they cut back on spending. Lucky for the big names, this translates to slower growth for everyone else.
Uncertainty: The New Trend
It’s like “trend‑watching” for the economy: uncertainty is the buzzword, the rumor that’s blooming across every market.
From fluctuating stock exchange values to a surge in gas prices (yes, that’s a thing), households feel the burn. For SMEs, survival is about juggling skyrocketing expenses and juggling money on tighter margins.
Supply Chains: Why It Matters
Even if a small shop never set foot in Russia or Ukraine, its suppliers might have a footnote in the news. That could mean sanctions hit them, messing up the goods flow. And remember, where oil is at a record high, shipping costs climb, raising the price of everything from food to shoes.
This is the domino effect many UK SMEs will feel first-hand.
Planning for the Long Haul
Here’s the big takeaway: politics and markets are playing out like a long‑term chess game. If businesses spread out their supply chain—no longer glued to a single region—they’ll have a sturdier base.
Europe’s continued sanctions are only going to intensify price hikes and unravel shipping routes. Consumer confidence? Falling.
So, cut the extra costs, put a pause on expansion, and get your operations as lean as possible. That’s how you survive the roller‑coaster.
About the Author
Neil Debenham—entrepreneur, investor, and the “fix‑it” guy for UK businesses—has guided over £50 million in private equity and debt into scaling ventures. He’s the one to call when the world feels too volatile.
