Last year was a bumpy ride for many, with most owners focusing on maintaining cashflow, as they dealt with rising costs and limited capacity to lift prices as customers became increasingly scarce. As 2024 commences, it’s a good time for small-business owners to think about business planning for the next 12 months.
Looking ahead, the macroeconomic environment is likely to continue to present challenges, with inflation sticking around and high interest rates keeping overall economic growth subdued. Therefore, small-business owners shouldn’t plan for lower interest rates in the first half of 2024, with the consensus among financial market analysts that major central banks will likely wait to see how the historically fast interest rate hikes impact inflation. On a positive note for owners, finding staff should start to get a little easier as labour markets rebalance.
The most successful businesses in 2024 will be those that focus on lifting their productivity to grow and boost performance, especially during periods of tough trading conditions when businesses are focused on getting more out of existing staff and other inputs.
So, as a small-business owner, there are several steps you can take to make sure you’re entering the new year in good shape.
Small-business owner 2024 checklist
- Maintain cashflow focus to stay profitable: Inflation has come down but prices continue to rise faster than normal. Keep a close eye on cashflow and make sure your prices can cover your costs so the business stays profitable. Staying profitable means looking at both revenue and costs. On the revenue side, you need to make sure you are stocking the types of products that customers want, not carrying too much stock and charging prices that cover your costs. When it comes to the cost, it’s a good idea to work with your financial advisor to make sure you are getting the best deal possible on all the costs you can’t avoid – such as power and rent.
- Look for automation opportunities to lift productivity: Every business has its own workflows, and reviewing these processes will help you find areas for improvement. All small businesses, no matter their industry or their size, can also benefit from adopting digital tools to automate day-to-day tasks and make operations as efficient as possible.
- Focus on how you can serve your customers best as they experience tougher times: The new year may continue to be tough for customers as cost of living pressures persist. Small-business owners need to work out what levers they have to capture scarcer spending by consumers. This includes making sure you reward loyal customers and provide them with what they really need, even during tough times.
There are many ways you can offer additional value to customers during a period when they might have fewer dollars to spend in your business. Weekly specials, loyalty discounts and product bundling are just three ways you can help them stretch their dollars further and encourage them to come to you instead of your competitors.
