War in Ukraine: Small Business Impact and Strategies

As Russia marches on Kiev in an attempt to overthrow the government and end the unchallenged era of American Globalization, I find myself wondering what impact, if any, the Russian invasion will have on small business. As a Fractional CFO, my job is to manage risk and financial return for small business owners – so what risk does war in Ukraine pose, and what opportunities?

AP Fraud Threats from Russian Hackers

The number one source of fraud is no longer internal accountants, but external hackers sponsored by Russia, China, and other foreign states. With Russia’s economy damaged by international sanctions, an increasing number of Russians will be driven to work for predatory companies with schemes to defraud small businesses.

Your accounts payable clerk will be their #1 target. Hackers use proven schemes such as the new vendor bank accounts scam, cryptofreeze, and spear phishing impersonations. Are your AP controls setup to deter these attacks?

CFOshare’s accounting team specializes in assessing and overhauling AP security to implement best
practices and deter external hackers. Contact us is you are interested in a free assessment of the
security of your AP systems.

Shortage of Software Engineers

Ukraine has become a popular nation to outsource software development. The war has already disrupted basic public services like electricity and telecommunication; plus, many have sought refuge status in neighboring countries, taking their time and labor offline for an indeterminate amount of time. This all exacerbates an already existing shortage of software engineers. If you company uses outsourced software engineers, you should expect the cost of this talent to rise and vacancies to be more difficult to fill. But do not abandon your Ukrainian developers! They need your support now more than ever.
If you are a software development agency, now is a great time to pursue new contracts or raise prices in response to the tightening labor market.

Shifting Capital Markets

Western nations including the United States have been swift to cut Russia off from capital markets,
resulting in a shift of assets. We do not yet know where these assets will end up, but it its likely they will land in Euro or Dollar-denominated instruments, lowering the cost of capital for American businesses. In short: it’s a great time to borrow money or raise equity investment (as it has been for the past 2 years.)


Between China and Russia’s growing military assertiveness, the global container shortage, and the overall logistics problems created by Covid, large corporations are looking increasingly to reduce foreign risk by localizing their supply chains. This is good news for USA based manufacturers and service organizations like customer service centers who faced strong foreign competition over the past three decades. If your customer base has exposure to risky supply chains in China, eastern Europe, or the south Pacific, now is a great time to try to expand your market share even at a higher price than foreign competitors.

Government Funded Growth

The US Government has released billions of dollars to reduce foreign dependency on strategic supplies
like lithium, microprocessors, and photovoltaic cells. Check out for a list of government grants and contracts your business may be qualified to pursue. Defense spending overall is likely to increase, especially if the House changes to Republican majority at this year’s midterm elections. Small manufacturers should consider shifting their focus from old growth areas like aerospace to defense work.

Plan your business’ impact

No two businesses will be affected by the war identically; moreover, there are several other
macroeconomic factors at play such as inflation and rising interest rates. Work with your managers and
strategic business forecast to understand how your business will be impacted and proactively manage
the risk.

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