With the new year now upon us, it provides a good opportunity to take stock of what happened in 2022—in your personal life, business and with your finances—and think about what changes you’d like to make or need to make in the year ahead.
Experts are cautioning that the year ahead could bring more uncertainty. It certainly brings a whole plethora of challenges with still high inflation, high food and housing costs, and fuel costs that also remain high and volatile, as well as ongoing stresses and strains of supply channels. Interest rates have been forced up while there is still a people shortage across some key sectors that the govt have been slow to respond to.
This all makes for a year ahead that needs to be well planned out and risks (real or anticipated) impacting you personally or your business, properly thought through and considered.
So how best to start the year:
Reflect on what went right in 2022 and what didn’t. Within that, what changes if any are likely to materially impact your business in 2023.
Take time out to understand your business landscape and what you need to do to first prepare for the year ahead, but also to take advantage of opportunities that may also arise.
Look internally at processes and procedures to assess what can or needs to be improved. Their improvement could save you money.
If you have staff resourcing issues, think about using temporary resources in areas where work volumes are volatile. Far easier to adjust staffing levels with a flexible resource than with permanents.
Understand your working capital requirements and each element’s key characteristics. Look at applying sensitivities to some of these elements to better understand what your cash flow and working capital needs are if: revenue drops by x%, core costs rise by x%, salaries and wages increase by x% and so on.
It's far better to be prepared for the coming year however it may turn out than operate on a wish and a prayer. The year might not be all that pretty. Still, at least you will be prepared for it, and if it is likely to be one where growth is a real possibility, knowing how best to manage that growth in such a challenging market environment can only be good for you (stress levels) and the business.
Taking a step back and properly analysing your options, formulating actions to help deliver on those expectations, is important. Need help facilitating that process, then give us a call.