Setting Your Business Strategy for 2023: New Challenges, More OpportunitiesSubmitted by Teacher Advisors on February 16th, 2023
With record-setting and inflation and a red-hot labor market that turned to hiring to support your business into a competitive sport, last year seemed about ten years long. Will we see a return to normal this year? The Fed may have something to say about it. The message is clear that lower inflation is the priority, not the economy. The "soft landing" may be possible, but a recession seems more likely.
How can business owners plan for another year in which full recovery may still not be in place?
- Break down the challenges
- Identify strategies
- Be realistic
- Access the resources you need
Think About Solutions, not Challenges
Facing a difficult year can distract from long-term planning, but taking a longer view is actually the best way to address problems now and set yourself up for future growth.
Focusing only on the problem can be defeating. Instead, plan proactively for the solution. If you need to raise prices or adjust your product offering, having a solid marketing strategy in place can mitigate the impact. Focus on your strengths in your marketing: are you a local business? Do you have longevity or history? What are your differentiators? Building a marketing strategy in today’s digital world should incorporate your website, social media, and email.
If costs are an issue, is there technology that can remove friction in your process or allow you to automate or simplify? Is it time to rethink the costs you control, for example, leasing costs or equipment costs?
For many businesses, attracting and retaining talented employees in this market is the biggest roadblock to growth. Employees aren't just about salary now – having a good employee benefits package can make a difference in recruiting. Depending on the size of your business and your structure, there's likely a retirement plan that can create employee loyalty and provide both your business and you as owner with significant retirement savings and tax breaks.
Do You Need to Raise Capital?
For many business owners, raising capital is a way to get through the challenges of an inflationary and potentially recessionary environment. Sources of capital can be loans from governmental sources, such as the Small Businesses Administration, or from banks or credit unions. You may also have private sources. Another option is to offer an equity buy-in to an investor or as part of an eventual succession plan.
All of these start with getting your business accounts in order and presenting your business in the best possible light. Are your taxes pristine? Can you shift to prioritize repeatable income? If you have lumpy income from big commissions or jobs, can you provide a history that identifies cyclical or other predictable catalysts for these?
Have You Thought Through Your Taxes?
Changes to the business climate may present opportunities to save on taxes, and not just from lower revenues. You should consider your taxes from a multi-year perspective, so you can plan for changes to your income and expenses. New marketing spends, professional fees, equipment costs – all of these may be deductible. The costs associated with starting a retirement plan? That’s a tax credit.
Do You Have the Resources You Need?
You can’t do everything yourself. Being realistic about the demands on your time is the first step – you need to have a life along with a business. The next level is identifying what absolutely needs to be done by you and what can be handed to someone else. From there, think through:
- Is there someone already on staff that can take on additional functions or lead projects?
- What can be outsourced? Where will you find those resources?
Small business owners often need a quarterback that can manage multiple projects, whether internally led or externally sourced. Hiring a marketing team, working with a tax professional or accountant, or getting a legal team in place for a sale or equity restructuring is in itself a big project.
A financial advisor that specializes in working with small businesses may be the solution. They have the benefit of expertise developed by working with business owners at all phases of the cycle and may also have access to a network of professionals that can be brought in to work on specific problems. Working with a financial advisor can also help you keep your personal financial goals and your business goals working in tandem.
The Bottom Line
Growing a successful business is challenging, no matter the macro environment. Keeping a long-term plan in mind, and ensuring you have the right resources, can help you reach your goals.
The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but is intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax, or financial advice. Please consult a legal, tax, or financial professional for information specific to your individual situation.
This content has not been reviewed by FINRA.
Teacher Advisors, LLC is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Teacher Advisors, LLC, and its representatives are properly licensed or exempt from licensure. Teacher Advisors, LLC does not provide legal, accounting, or tax advice. Please consult your attorney or tax professional for such matters.