As we approach year end, business owners may be thinking about making 2023 a year of growth. As the end of the year nears, we recommend business owners explore several areas of opportunity for company growth:
1. Review long-term business strategy. If your business’s liquidity and short-term money is sufficient, there is an opportunity for business owners to focus on their longer-term strategic planning. Now may be the best time to review your 2022 business plan and use that to develop your 2023 plan as well as three- and five-year plans. In particular, consider how the recent macro-economic trends, volatility and the pandemic changed your company’s perspective and what challenges and opportunities have appeared as a result.
Entrepreneurs can miss out on opportunities for growth or new business by hoarding excess cash given market uncertainty. A question to ask includes: which priorities will drive your business growth and a stronger valuation for when the time comes to consider possible monetization or exit options? What progress and results are there from initiatives that you may have implemented as a result of the pandemic or supply chain issues last year and should you consider any adjustments? Showing strength and growth in today’s environment will likely be important to attracting a premium valuation.
2. Demonstrate care for employees. As competition for talent increases and becomes more difficult to find, it’s essential that you go the extra mile for your employees and let them know that you and the company are available for support and assistance with their career development. Do not underestimate the value of the personal connection with your employees; when times are difficult, they need to know you’re accessible. Also, be sure to communicate the benefits you offer employees as they may not be top of mind. In the face of a competitive labor market, these actions can help reduce the burden of employee turnover.
3. Ways to capture additional market share. Now is the perfect time to put your business on the offense. If the survival and maintenance of your business is under control, marketing campaigns to expand your brand can be timely and a powerful use of time and resources. A consistent and creative use of newer social media platforms can be cost effective and bring you closer to your customers.
4. Work on retaining clients. The same circumstances that create opportunities to attract new customers could also work against business owners. While you may be diligent in checking in with clients regularly, continuing this is important. Clients should know you’re feeling optimistic and ready to assist them. Conference calls, webinars, educational content and promotions can all be effective touch points. A simple check in and “how are you doing?” can also work. Staying visible and engaged is the key.
5. Analyze your business’s financial situation from this past year. And if these planning topics don’t satiate your entrepreneurial need for reflection, there may also be some financial matters that owners can address before the end of the year.
From a near-term cash flow perspective, the end of the year is an important time to look at profit progress versus goals because it is your team’s finish line. How might the recent rise in interest rates impact your existing or strategic financing needs? If you were not where you wanted to be in terms of earnings, you may want to reassess your goals and consider a new game plan for next year. What programs require increased effort and what should be canceled? Would a new approach to reporting and metrics create transparency and help get things on track?
As always, it is recommended that business owners start, or continue meeting, with financial advisors who can provide expertise on growth opportunities throughout the year.
Eric Thompson is a financial advisor with Thompson, Singor & Cimmino, UBS Wealth Management USA. He can be reached at firstname.lastname@example.org.