Preparing for Success in 2022
As the year comes to a close, we reflect on the accomplishments and challenges of 2021 and look ahead for opportunities to be successful in the new year and beyond. Many small businesses have experienced massive changes and adjustments in operations and human resource management in response to the pandemic. Here are some tips to help you prepare for success in 2022.
Adjust How You Plan
One thing we’ve learned is that predictability is fleeting. Gone are the days of setting and executing a single plan for the new year. You must be able to pivot at a moment’s notice. Here are suggestions to stay on top of volatility.
- Staying connected in the community and fostering relationships with your customers and vendors is imperative.
- Work with your accountant to develop a cash flow forecast and review it monthly to stay on top of trends.
- Make adjustments to your forecast as needed and use it to look for new opportunities to increase revenue or cut expenses.
- If your forecast shows months ahead that are not profitable, working on changes proactively may turn them around to be profitable.
Establish or Confirm Banking Relationships
Have credit options available either with your current banker or develop new financial relationships. Having a line of credit available when cash runs tight is essential for small businesses. Your cash flow forecast will help to determine time periods when you may need to use this available credit. Also consider consolidating loans which may be beneficial to reduce overall payments.
Review Employment Practices
Consider relationships with your employees and review your current employment practices. If you’ve experienced high turnover, dig into why. Don’t assume your business is just part of the national trend. Are wages and benefits in line with your industry, your competitors and employee expectations? Take a hard look at management and consider if toxic people are part of the problem. Conduct employee exit interviews. Take surveys with current staff about working environment and remote options. Listen to your employee’s feedback. Based on these responses, create additional forecast scenarios to see how changes impact cash flow.
