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Own a small business? Read on for tips on mitigating some of your top worries.
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Being a small business owner means carrying a lot of weight on your shoulders. And that can be overwhelming, especially at a time when economic conditions aren’t the greatest.
These days, the biggest concerns among small business owners are inflation, rising costs, and economic uncertainty (26%), according to Truist’s Small Business Pulse Survey. And if you share these concerns, here are some steps worth taking to address them.
1. Do a financial audit
Do you know exactly how much money you’re spending on things like inventory, overhead, and workplace benefits? If higher costs are putting a strain on your business and you’re worried about costs rising even more, it may be time to do a deep dive into your company’s finances.
Comb through your banking records to see exactly what your inflows and outflows look like. Then do the same with your credit card statements. That should help you make savvy cost-cutting decisions if you decide you’re simply spending too much.
2. Trim some expenses
Many consumers are cutting back on spending to cope with inflation. And you may want to take a similar approach to your business.
Once you’ve completed your financial audit, you may be in a stronger position to determine how much less money you need to be spending. From there, you can look at your various expenses and determine which ones should land on the chopping block.
Of course, these are difficult decisions to make. So it could pay to bring in a consultant to guide you along. The upside of going this route is that a consultant is going to look at everything from a numbers perspective — not an emotional one.
You, for example, might harbor feelings of sadness or guilt if you’re forced to reduce your staff or take away some of the benefits your workers have come to love. And you might avoid moving forward with layoffs and instead try to convince yourself they aren’t really necessary when, in reality, cutting staff is the most financially sound thing to do. So you might need a consultant to come in and help you implement some hard choices.
3. Conserve funds
Many financial experts are still warning about the possibility of a 2023 recession. As a small business owner, that can be downright nerve-wracking. If you’re worried about an economic slowdown, one of the most important things you can do is shore up your company’s savings.
Start stockpiling more cash in the bank so you have reserves to tap if business slows or even grinds to a half. This may be easier to do once you’ve managed to trim some of your expenses, whether it’s workplace benefits, headcount, or other costs.
It’s not exactly an easy time to run a small business. Not only is the cost of doing business higher these days, but there’s enough uncertainty to make consumers skittish about the idea of spending their money. But if you’re worried about inflation, rising costs, and an economic downturn, then it pays to take the above steps to get yourself — and your business — to a better place.
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