Forming a Successful Business Strategy in 2023

By

Emily McIver

-

Reviewed by

on

November 17, 2022

This article is Tax Professional approved

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If you've put aspects of your business on hold until things returned to a bit more normal (whatever that means), it might be time for a strategic review.

The past three years have tested entrepreneurs everywhere, forcing them to throw out the established playbook and revamp how they do business.

So what comes next?

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Despite the unknowns, one thing is clear: adapting to a new business and economic climate will take a resilient business strategy that puts customers first. Here are some business trends to keep in mind for 2023.

Proactively protect cash flow

In 2023, interest rates spiked to the highest since the 2008 recession and while consumption is still trending upward, it’s expected to drop off as costs continue to rise.

The economic situation has led businesses to be more cash conscious, but improving your spending habits or finding savings in your production process will benefit you far beyond the potential recession.

Be prepared for reduced lending

As banks constantly adjust to growing interest rates, lending will tighten up. While larger corporations are perceived as safer lending opportunities, it’s predicted that lending to SMEs (small to medium enterprises) will be impacted the most.

As you wait out this period, look into alternative forms of credit. Invoice factoring involves turning your outstanding accounts receivable into an immediate, but lower, payout. Or consider a merchant cash advance from your payment processor. The advance pays you up front, but takes a cut of future payments until you’re square.

Account for higher shipping rates

Supply chain issues are expected to continue with conflict in Ukraine and China’s zero COVID policies ongoing.

Not only does this mean longer shipping times, but higher costs. It’s important to look at your monthly shipping spend and account for an increase in 2023.

If you offer free shipping, it’s worth reevaluating the spend amount to get it. For example, spending $50 to unlock free shipping might start cutting into your margins, but not if it’s increased to $75.

Prepare for shortages

Even as small businesses overcame the immediate problems of COVID-19, the domino effects of the pandemic are set to linger into 2023.

Expect supply chain issues

Fast shipping is no longer a guarantee and manufacturing and shipping delays continue to force businesses to adapt in 2023. To manage this change, businesses need to be transparent with their customers about supply chain delays—and ramp up customer service efforts to compensate.

Reevaluate your labor needs

In October of 2022, US-based employers made 33,843 public job cuts, a 13% increase from September. This includes some high profile layoffs in the tech field. Don’t feel like you’re alone if you need to tighten up.

While layoffs are upsetting, it could also represent an opportunity for you if you’re looking to add to your team. The hiring pool is expanding with high-level talent that can kickstart one of your initiatives in the new year. Consider making moves that reduce what you outsource, like having in-house marketing rather than working with an agency.

Make sustainability improvements

After a year of record-breaking heat waves, flash flooding, and other climate emergencies, more and more consumers are waking up to the fact that what they choose to buy has an impact on the world. Approximately 70 percent of people surveyed by the Boston Consulting Group say that they’re more aware of climate threats since the pandemic began, with 40 percent committed to adopting sustainable habits in the future.

Embrace sustainability

Green business trends aren’t going away any time soon, with two-thirds of global consumers willing to pay more for sustainable goods that align with their personal values.

If that sounds like something you’re interested in, start by taking a look at the areas of your own business to see where you can make planet-friendly improvements. Think: switching to compostable packaging, choosing sustainable suppliers and service providers, or giving a portion of sales to environmental non-profits. Earning a socially responsible third-party certification like the B Corp Certification can also show your customers that you practice what you preach.

Avoid greenwashing

In the past, it was easier for unscrupulous businesses to get away with false or exaggerated claims about their environmental impact. Labels like ‘natural’, ‘organic’, and ‘eco-friendly’ were used to attract environmentally-conscious consumers, even if the reality didn’t live up to the claim.

Today, people are increasingly aware of greenwashing marketing efforts. If you plan to position your company as sustainable, make sure you can back it up with receipts. Otherwise, you may end up doing more harm than good to your reputation.

How Bench can help

Once you have a business strategy to steer you through the uncertainty, it’s important to keep a pulse on the state of your business. Keeping track of weekly and monthly sales figures can tell you what aspects of your new strategy are working, and what may need refined. Plus, having organized and accurate financials from the start of the year saves you time and stress down the road—so you can stay focused on the tasks that grow your business.

Bench gives you a team of bookkeepers to organize your finances for you. Our easy-to-use software allows you to easily check in on your financials throughout the year. Bench’s intuitive dashboard brings all of your bank account and credit card transactions into one place. And with real-time reporting, you’ll always know where your business stands and can validate your business strategy as it happens.

Try Bench for free and see what getting a handle on your finances feels like.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.
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