Concerned About the Future of Your Business?


So what concerns do you have for the future of your business and how can you address them? Recently, The National Federation of Independent Business (NFIB) published their small business optimism index and showed that for the sixth straight month, the reading on the index slipped below the 48 year average of 98 down to 89.5%. Small business owners expectations for the next six months have fallen by seven points to a net negative 61%.

Top reasons for their concern:

Inflation: A third of them said this is important problem for operating the business and that is the highest level since late 1980. They also expect real sales to be lower.

Worker Shortages: 50% of business owners reported job openings they could not fill in June of 2022. 94% of small businesses that are trying to hire have reported few applicants.

The reason for this declining optimism is fueled by concerns about inflation and staffing, but there are other concerns as well.

Economic Policy: Wash. DC is not focused on supporting business, but instead on tax hikes and regulation

Losing Customers: If consumers cut back there are likely less regular customers, if they won’t pay the higher prices, caused by inflation and supply chain issue.

Do these concern you too?

KEYS TO THRIVE AND NOT JUST SURVIVE IN THIS DOWNTURN

Are you in this bind? So what can you do? Well, there are many ways to approach this. Of course, you can't probably change the price of the goods and services that you are seeing rise every day. And therefore, you have to pass those on. But there may be ways that you can thrive and not just survive the potentially arriving recession and especially the conditions we are under right this summer.

First of all, of course, you can try to renegotiate your contracts with suppliers to cut your cost of goods.

Second, you can implement a process to reward your current customers or incentivize them to do more business. Create recurring revenue. Give discounts for repeat business or large orders.

Thirdly, you can make your workplace more attractive and there are many ways to do that. Recognition programs, benefits, cost free perks that are valued, etc. That way you will not only retain, but perhaps attract those applicants that are few and far between.

Finally, it is important also to manage your cash and your expenses in a very monitored way. Be very focused on trimming expenditures. You need to do this to stay in business. If possible put the savings in a capital reserve account where you can accumulate savings. If you have capital you may even be able to expand or capitalize on opportunities among your peers or competitors.

So if you have these concerns about the future of your sales, about the future of costs, and your declining customer base, there are ways to address it and get in front of these problems, before they arise so that they are minimized. It may be wise to diminish your debt or not take on new debt because rates might continue to climb. Yes, we may have a recession coming and some are predicting it will not last very long, but we don't know about how long the higher prices are going to last. So, it is important to prepare now and have a plan and strategy to create that thriving result that your business needs.

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Karen Powell started Grow Profit Now which provides financial services to both small and medium-size businesses. We give the same attention to all clients, no matter how large or small.

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