Eyal Lifshitz is CEO of Bluevine, a leading provider of small-business banking.
April is Financial Literacy Month, and I think it’s important to note that a lot of the conversations around macroeconomic conditions that dominate popular culture and media don’t necessarily relate to what financial literacy means in practice for many small business owners.
For a large number of small business owners across the country, financial literacy isn’t about obsessing over the latest Consumer Price Index (CPI) report or being glued to the news channels for talking-head analysis of economic forecasts. Far more often, financial literacy for small business owners is about finding pockets of resilience, controlling costs and making smart decisions—over and over again—in the face of uncertainty. And we should celebrate that.
Ask almost any economist, and you’ll hear the same thing: Macroeconomic conditions are incredibly complex and, at present, often confusing. Inflation remains persistent, interest rates haven’t declined significantly and the market seems to suffer significant swings every other week. Beyond that, ongoing trade disputes and plummeting consumer sentiment make it so that, from a macro view, it’s hard for experts to say anything about the future with any certainty.
But most of those conversations are removed from the day-to-day lives of many small business owners. Small business owners are fielding calls about late deliveries, figuring out how to cover shifts or dealing with a contractor who’s running weeks behind schedule. There’s no time for policy debates—just quick decisions to keep the lights on and the business humming.
Big corporations call this “agile methodology” and pay consultants millions to teach it to them. For small businesses, it’s just another Tuesday.
And they’re better off for it. While big companies often live and die with market fluctuations and, as a result, have to spend endless hours trying to analyze and predict how to respond to them, small businesses are building the kind of resilient muscle memory that keeps them alive when things get tough. That resilience is really the lifeblood of our country, and it’s the reason I started my company.
Let’s use, as a hypothetical, the owner of a children’s education franchise navigating recent economic events.
When the sticky inflation and mass layoffs we have seen in recent years resulted in less disposable income for many of his customers, he was able to immediately increase his hours in the center dealing with customers, strike discounted promotional rates and begin offering new at-home tutoring sessions to his clientele to make ends meet.
His small size allowed him to quickly bypass all the risk-analysis meetings that might occur at an enterprise company and insulated him from the type of emotionless layoffs that could have affected him if he instead worked at a Fortune 500 company. Instead, his willingness to get scrappy and his unique sense of financial literacy allowed him to survive, and what began as a side hustle to get through tough times grew his client list 30% and pushed his profit margin to all-time highs.
What makes small businesses inherently resilient is their combination of immediacy and ownership. As an owner, there’s no bureaucracy creating distance between the problem and the solution—it’s just you, facing the issue head-on with everything at stake. Small business owners develop what psychologists call “adversity quotient”—the ability to persevere through challenges because their identity is woven into the business itself. They’re not just protecting market share, they’re protecting the livelihood of themselves and their employees. It’s a personal connection to outcomes that drives innovative thinking.
Small businesses win because their learned financial literacy is how to navigate uncertainty—it’s practically in the job description—and in certain cases, that can allow for insulation from the macroeconomic conditions so frequently discussed in media and popular society.
So, while headlines may highlight the sheer volatility and unpredictability of the market for the foreseeable future, for Financial Literacy Month, I think it’s worth highlighting small business owners. I founded my company to try to make their lives easier, and though they might not make national headlines as much as their enterprise-level counterparts, they have a thing or two to teach us all about how business should be done.
Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
Read the full article here
