The world is a volatile place. What can small businesses that form the deep foundation of the construction industry do about it? While they can’t necessarily control the macro forces that buffet the economy, they can monitor their cash flow, which in turn builds their confidence and bolsters their capacity to weather any storms.

That’s why Brett Sussman, a vice president with American Express, helped the financial-services company create Business Blueprint, a platform specifically designed to help small businesses manage their cash flow, business products and accounts. Business Blueprint works in tandem with the company’s new “Small Business Financial Confidence Report,” which debuted in May. Surveying a range of industries—with 10% of participating businesses falling in the construction sector—the report found, unsurprisingly, that small businesses, especially those in construction, face more challenges when they lack not necessarily cash flow but an understanding of their cash flow.

While the Business Blueprint is not an all-encompassing solution to these challenges, it can level the playing field by helping small businesses understand the game they’re playing. Construction Executive recently talked to Sussman about the current climate for small construction businesses—including how to navigate the collapsing banks, inflation, supply-chain issues, legislative and regulatory hurdles and lingering after-effects of a global pandemic that have plagued the industry for the last three years.

WHEN AN ECONOMY LOOKS LIKE IT DOES TODAY, HOW LONG DO YOU EXPECT RAMIFICATIONS TO BE FELT?

Over the past few surveys, we’ve asked small businesses how long they think inflationary pressures will remain. They never have a certain answer in terms of when the end is in sight; we are often looking at a six- to 12-month continuation for that sort of period. That is where small businesses have to scenario-plan how to get through those next six months.

HOW CAN SMALL BUSINESS OWNERS PREPARE BEFORE AN EVENT LIKE A GLOBAL PANDEMIC, INFLATION OR EVEN A RECESSION?

The resilience of small business owners through this process, through the pandemic, has been the mother of reinvention for a lot of small businesses. They had to change their business model and find ways to more cheaply acquire customers. The tool we are offering—Business Blueprint—is here to advise small business owners that they really need to have visibility a number of months in advance in terms of macro shock. If there is an opportunity for a big, new project that hopefully will lead to high revenue but not until a few months in the future, they can take advantage of that because they can see it coming. That is the biggest thing for these businesses: that visibility and, hopefully, a little bit of a longer-term duration should an event like this happen again.

IF BUSINESSES ARE PREPARED BEFORE A NATIONAL OR GLOBAL EVENT, HOW CAN THEY RECOVER AFTER?

Cash flow is king! You really need to understand your cash-flow position these days. Seeing what is particular in this industry’s project pipeline makes you smarter on picking projects that will work and be completed on time, versus ones that won’t work. Hopefully we’ve all learned a lot from the series of events of the last few months—even years.

One of the biggest concerns I see from small business owners is pricing—projects, products, etc. That still remains a very interesting challenge: How much of inflation that businesses are seeing on raw materials can they pass along to customers? Cash-flow insight will give them the confidence to price their services appropriately.

Have confidence in instituting price gain! Customers’ mindsets have changed in understanding how important the cost side is to businesses.

WHAT IS THE CURRENT ECONOMIC OUTLOOK FOR SMALL AND MID-SIZED BUSINESSES?

Small businesses are feeling the economic uncertainty; they really are excited about how to grow their top line while being increasingly concerned about their bottom line. Of those polled, 75% are really feeling the impacts of inflation.

With lots of new businesses formed over the last two years, many are trying to remain competitive. Hiring costs, costs of raw materials like lumber and steel, ingredients costs for restaurants—they have been really volatile. Due to navigating that volatile environment, businesses are feeling less optimistic about the economy as a whole compared to this time last year.

WILL THERE BE A RECESSION IN THE NEXT SIX TO NINE MONTHS? IF SO, HOW MIGHT THAT AFFECT SMALL TO MID-SIZED BUSINESSES IN THE CONSTRUCTION INDUSTRY?

Small businesses right now are feeling less confident about financial growth opportunities available to them. Only about half of small business owners report feeling they can take advantage of growth opportunities coming up. That concern is more pronounced when looking at businesses with fewer than 20 employees. They are really concerned—not necessarily that they know if there will be or won’t be a recession, but that they just don’t have the visibility into their cash flow that they’d like, that they aren’t feeling as competent about opportunities coming up.

A polled 40% of small business owners are passing up new projects because they are not confident that they have the cash flow to complete them. In the construction sector, there is a large, upfront cost for some projects. Owners are often turning those projects down because they don’t know if they can make the cash flow work.

WHAT DOES CREDIT-CARD ACTIVITY REVEAL OR PREDICT ABOUT THE STATE OF THE ECONOMY?

What we have seen is credit cards are another incredibly valuable tool for small business owners—business credit cards in particular. With built-in flexibility, pay-over-time options and working capital, business credit cards are another tool I think small business owners should use. They can really get the most out of those types of credit cards in this environment.