The COVID-19 pandemic has deeply affected small businesses across the U.S. As entrepreneurs scramble to stay afloat or rebuild, the new year, and new challenges, are rapidly approaching.
This year, many consumers prioritized personal safety, dealt with illness, job loss, and lack of available products and services. Upcoming consumer trends include a major focus on e-commerce, an explosion of alternative payment options, the desire for personalized and empathetic customer service, and a high demand for virtual and digital businesses.
A continuing trend is the growth in consumer support for small and local businesses. Now is a great time to capitalize on the popularity of “shopping small ” and put business strategies in place to help you prepare for 2022 and its challenges.
Small business challenges in 2022
The COVID-19 pandemic has increased challenges faced by entrepreneurs. Many challenges this year included managing supply-chain breakdowns, complying with coronavirus mandates, shoring up cash flow, running a remote business, paying down debt, and more. Take some time to prepare for the new year to give your business the best opportunity to succeed.
Hold an end of the year all-hands meeting with your team
Your team has helped you keep it all together during extremely challenging times. Show your appreciation and share important business information before the year winds down.
An all-hands meeting is a regular, company-wide gathering where all employees, leaders, and stakeholders meet to discuss the business, share information, and answer questions. In these uncertain times, it’s more important than ever to practice transparency with your team.
The goals of your all-hands meeting should include:
- Share updates about the business of the past month, quarter, or season
- Reinforce the company mission and strategy
- Celebrate milestones and the people who made them possible
- Answer any questions
Revisit your business plan
A business plan has two primary purposes. First, it acts as an organized roadmap to help you analyze your plans for marketing, sales, production, distribution, etc. The second purpose is the reason many entrepreneurs put together a plan-seeking funding from a bank, credit union, or another type of lender. (NOTE: SmartBiz® does not require a business plan when you apply for an SBA loan or a bank term loan through one of our marketplace banks.)
If you don’t have a business plan in place, now is the time to create one to help you get on track for next year. Use our guide to help you get started. How to Write a Business Plan: The Ultimate Guide.
Analyze financial statements
It’s paramount that you understand where your company stands financially, especially if you’ve experienced a drop in revenue. Compare your business financials to prior years so you have a global view of where you stand. It’s a best practice to work with a financial professional to help you crunch the numbers. The Small Business Administration (SBA) suggests that you review the following:
Profit and loss statement
A Profit and Loss (P&L) statement measures sales and expenses during a specified period. The function of a P&L statement is to total all sources of revenue and subtract all expenses related to the revenue. Review this article to help you get started if you don’t already have this statement updated and in place: Business Profit and Loss: Tips to Prepare Your Statement.
Cash flow statement
A cash flow statement tells you how much cash is entering and leaving your business. If your bottom line is coming up short, review our blog post Solving Cash Flow Problems Due to the Pandemic.
This document provides a snapshot of a company’s financial health at a specific point in time. You can use them regularly to see your business’s net worth and to provide lenders with an idea of how much you own, debts owed, and how much you invest in your operations: How to Create a Balance Sheet for Your Business.
Revisit last year’s business goals and adjust your business goals to address your unique business as it stands now. Work to set goals that are realistic and attainable. If you don’t usually set long and short-term goals, now is the time! Our article, Setting Business Goals. A Comprehensive Guide, outlines the SWOT (Strengths, Weaknesses, Opportunities, Threats) method to get you going.
Review customer feedback
Do you have online reviews or a low-tech suggestion box? Your day probably moves at lightning speed but reviewing feedback now can help guide your customer service, inventory offerings and more. If you don’t have a review collection system in place, consider incentives for customers to post on sites like TrustPilot®, Google® Reviews or Yelp®. It’s even more important than ever to engage with happy customers or address any issues that arise. If you don’t have a robust collection of positive reviews, our post can help you get started: The Best Way to Gather Customer Feedback.
Check your work/life balance
How do you feel physically and mentally? Even in the best of years, workers can feel burned out, exhausted, and overworked. But these issues have been magnified thanks to the pandemic lock downs and business uncertainty. You might be facing declining sales, health issues, or employee staff reductions. Review your day to determine if there are tasks you can cut down, eliminate, or delegate. No matter what your business, physical fitness goes a long way towards a feeling of wellbeing. Most people can fit in a short walk or bike ride each day to get their heart pumping. Check out our blog post 4 Essential Tips for Avoiding Burnout as a Small Business Owner for actionable advice.
Employee reviews and appreciation
Unless you’re a one-man-show, you probably have employees who help you run your business successfully. Now is a great time to do an annual review with each. Your employees may be facing additional work due to staff cuts and letting them know where they stand can boost productivity. There are dozens of ways to review an employee formally or informally.
In addition to offering salary increases or bonuses, a holiday gift can be meaningful. We have some suggestions regarding Employee Holiday Gifts on our blog here: Employee Holiday Gift Ideas for Small Business Owners.
Evaluate staffing needs
Because of business downturns and vaccine mandates, you might find yourself in need of additional help heading towards the next year. Check out this article outlining hiring challenges and how to address: How to Find, Keep, and Avoid Losing Your Best Employees in 2021.
If you have tasks that don’t require a full time, salaried employee, or if you’ve had to eliminate those types of employees, consider hiring a freelancer or contract employee. Freelancers can perform tasks like marketing, SEO strategy, accounting, public relations and more. See our Blog article to see whether independent contractors or employees are the best fit for your business: Employee or Independent Contractor: Which One is Best for You?
Explore giving back
Giving back to your community or a national organization is a great way to elevate your profile and help a cause you believe in. Whether supporting a local school or sports team, donating to a non-profit organization, or collecting items for the needy, you can make a difference. Look into organizations that support struggling small business owners if you’re able to contribute.
Put a communication plan in place
There are two types of communication to pay attention to during this stressful time. Have a plan in place for clear discourse with employees and customers. Customer communication can include social media posts, blog articles, newsletters, or website messaging. Be open and honest about the challenges you are facing and how you are addressing any problems. Review our article, Small Business Communication to Ease Anxiety in Times of Crisis, for some actionable advice.
Consider outside financing
Here’s where your business plan can help. You might need to cut back on expenses, adjust staffing, increase inventory, or more. Low-cost outside funding can also be used to refinance high cost debt, shoring up your bottom line.
The first step is to determine how much you need. Work with a financial professional if you’re not sure. Next, look at your credit scores. This is key to getting funds when you need them. Some types of funding include low-cost SBA loans and bank term loans.
With research, planning, and creative strategies in place, you’ll be well positioned to face the challenges of 2022. The SmartBiz Small Business Blog is full of resources to help you succeed covering topics like marketing, staffing, credit scores, lending, and more.
WHAT YOU NEED TO KNOW: The SmartBiz® Small Business Blog and other related communications from SmartBiz Loans® are intended to provide general information on relevant topics for managing small businesses. Be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed. Please consult legal and financial processionals for further information.