by Rob Joseph, Director, BeaconCFO Plus
As 2021 comes to a close, small businesses everywhere are breathing a sigh of relief. You’ve made it through another tumultuous year, and 2022 looks brighter.
While we anticipate 2022 with a positive outlook, the reality is that many of the challenges of this year will follow us as the calendar turns to January. From the lingering pandemic to widespread supply chain shortages, there are still challenges that will need to be met in the new year. How can business owners set their small business up for success in 2022?
Our CFOs have gathered a few thoughts to help guide your thinking and suggest several key areas of focus for your small business:
- Improve your cash-flow forecasting. Protecting your cash flow is one of the most important things you can do. Look at cash flow in 2019, 2020, and 2021 to see how they compared. Consider working with an outsourced CFO who can help you get a better, more accurate picture of your company’s cash flow.
- Reevaluate your banking relationship. Do you need a bigger credit line or more favorable terms? Speak with your banker or, if needed, find a different banking provider that is more suited to your business needs.
- Plan for inventory shortages. The supply chain issues we are experiencing across the country are not going to dissipate quickly. Order long lead items for your business as early as possible.
- Create and build your emergency reserve. According to the 2021 Small Business Credit Survey, during the pandemic, 80 percent of businesses surveyed reported financial challenges. Of these businesses, 63 percent of business owners did not draw—or reduce—their salary and 51 percent paid business expenses with their personal funds. To avoid putting yourself in this position, we recommend focusing on building an emergency reserve that equates anywhere from 3-6 months of business expenses.
- Prioritize your recruiting. Push hiring planning and actions forward to put the right people in place even with the shortage of qualified candidates that many businesses are experiencing. Your employees are one of your greatest assets and worth the investment of your time and resources.
- Talk to your key customers. Schedule a meeting or phone call with your customers to have a one-and-one conversation about their outlook and needs for 2022. What are their greatest concerns? What can you do to better serve them? Use their insights to guide your efforts in the new year.
Work With BeaconCFO in 2022
Benefit From Experienced Financial Leadership
If your business lacks in-house financial leadership and expertise, you would likely benefit from our part-time or project-based CFO services. Our CFOs are ready to work side by side with you and your team, allowing you more time to focus on your responsibilities as a small business owner. We are uniquely positioned to help you navigate your current financial challenges and set your business up for success in 2022.