Financial trends are looking quite different than a few years ago. Prior to the COVID-19 pandemic, most people seemed to have a positive outlook on starting a small business. However, post-pandemic, small businesses are facing an array of ever-evolving regulations, overall economic uncertainty, cash flow shortages, and so much more. In addition, 2022 saw staffing shortages, inflation, increasing interest rates, and so much more. As we move into 2023, it’s important that small business owners stay positive and resilient.
If you need help managing your small business finances in southeast Wisconsin, let Nolan Accounting help. We understand that financial paperwork can be overwhelming, especially when you have so many other things to worry about. We provide a variety of accounting services so that you can focus on growing your business.
In this article, we’ll explain a few of the 6 financial trends that small business owners need to look out for.
Top 6 Financial Trends
According to research from the Bank of America, 66% of small business owners expect to see a revenue increase, and over half have plans to expand. Below we will discuss the top 6 financial trends to watch for:
Banks are becoming more customer friendly
Online banks/neobanks are becoming more competitive with brick-and-mortar banks by offering higher rates on checking/savings and becoming more business-friendly. Therefore, business owners should take the time to evaluate their current bank and determine if their needs are being met. You may find that you should find a bank with lower fees or with higher yields on checking and savings accounts to help earn interest on your current funds.
Inflation requires adaptation
Due to inflation, it may be a good idea to start thinking about ways to improve your efficiency and save money. Adaptability during this time is critical. At this time, it seems that inflation is here to stay, so think creatively about your strategies and operations.
Tailor your benefits to attract new employees
As we move into 2023, the labor shortage is likely to continue. Therefore, it may be helpful to offer options such as flexible scheduling, hybrid workplaces, mentorships, and more to attract and retain talent. The good news is, all of these can be done with a limited budget.
Borrowing costs will remain high
For the time being, it seems that high-interest rates are here to stay. Therefore, you’ll need to find ways to offset these expenses. If you need capital funds but traditional loans are out of reach, you may want to consider alternative options, such as grants or credit cards with rewards.
Communication is critical
For brick-and-mortar businesses, communication via social media and other channels is critical- especially if you need to change your hours of operation or increase prices. Inflation has an impact on customers as well, and the best way to help customers relate to you is to be honest about your struggles. Always be clear in your communications to preserve your customer relationships.
Operating expenses will continue to increase
As we continue moving into 2023, small business operating expenses are expected to continue to increase. Therefore, take the time to evaluate your expenses and find ways that you can save money by finding an alternative if there is one available.
Conclusion
Since the pandemic, small businesses seem to be struggling- and it doesn’t seem to be getting any better. This is why you must learn to adapt and do what you need to in order to remain competitive and relevant.
Let Nolan Accounting help you with your accounting needs so that you can focus on these things. We have the experience and expertise to help with a variety of tasks to keep your finances in order.