What if, one was to ask, “what’s a brilliant example of a smooth transition?” Well, what a bizarre question but hold on, we have a winner! The transition of small businesses from behind the door to behind the screen was of great elegance and is quite the answer. This brings back to the possibility of 2021 setting off as the quintessential blend of the “new normal” and the heydays. So, the question has to be asked! Will small business owners win this 365-day business battle or will they come across as the brave wolves of a fallen market? The answer lies in Finances.
When Joseph C. Tsai co-founded Alibaba, he knew he had something that no one else possessed but everyone needed. A flair to identify the fine gaps.
With 2020 being an economical rollercoaster, it would be wise for businesses to plan their finances from a very initial stage. Planning finances may seem to be a protracted piece of work but it can be achieved within a decent time period if one chooses a smart approach. There are so many ways to proceed with, such as consulting financial services, setting up your own R&D team for finances, just a simple google search and so on. Ultimately, the goal is to come up with the best suited financial strategies for your business. If you started off with a google search, this might be financially intelligent for starters!
THE 50 SHADES OF FINANCE
- FINANCIAL TRENDS FOR SMALL BUSINESSES IN THE YEAR 2021
- CYBER INSURANCE & DATA SECURITY
- COMPANY VALUATION
- THE ACCELERATED RISE OF E-COMMERCE
- OUTSOURCED CFO
- ONLINE MARKETING
- FINANCIAL HACKS FOR SMALL BUSINESS OWNERS IN THE YEAR 2021
- PREPARE FOR TAX SEASON
- SEEK PROFESSIONAL HELP
- SAVE FOR RETIREMENT
- INVEST APPROPRIATELY FOR RISK TO TOLERANCE
- EMERGENCY FUND AND PERSONAL CREDIT
This knack of identifying and filling the gaps in the market is the evolution of small businesses.
TOP FINANCIAL TRENDS FOR SMALL BUSINESSES IN THE YEAR 2021
- CYBER INSURANCE & DATA SECURITY
Gaps in cybersecurity leave many companies vulnerable. You are legally responsible for protecting your customer’s personally identifiable information (PII), such as finance and tax information, medical history, etc. A lack of security leaves you exposed to lawsuits and other liabilities that can affect your financial viability. Small business owners are especially at risk. Hackers know small companies lack the resources to protect themselves and are becoming increasingly aggressive with their attacks. This leads to data breaches and downright theft, but there are ways to reduce your risk. Cybersecurity insurance is a must for any company responsible for sensitive customer data. This will protect you from lawsuits and the expenses involved in addressing a breach. However, every reputable insurance company will also insist that you limit your exposure by investing in the appropriate technologies. Such technology can be expensive and there are thousands of options to choose from, but a knowledgeable consultant can help you architect a solution that’s right for you.
- COMPANY VALUATION
An exciting marketplace affects all sorts of things, not the least of which is the mindset of business owners and employees who are watching their equity grow. When companies are worth more, they have greater access to capital and can think about making investments that will lead to lasting, positive change. Perhaps you can hire more customer service reps or engineers, for example, to improve the value of your offering. Or, maybe you’d rather expand into a new market. What would we recommend given the current environment? Parking cash doesn’t serve anyone, so there’s plenty of institutional money looking for a home. This is the perfect time to consider your growth plans and raise capital for your business. Furthermore, if you’re thinking to exit your business in the next 3-5 years, be sure to build that into your plans. Evaluate the state of your organization today and decide what steps you need to take to increase your company’s valuation.
- THE ACCELERATED RISE OF E-COMMERCE
E-Commerce, which was already taking over, is now going through the roof as people are staying home and ordering what they need online. This has had an incredible impact on supply chains, logistics, systems, data, margins, and, well, pretty much everything. We knew this shift was happening, but now it’s happening all at once, quicker than expected, and it’s having a devastating effect on retail. What can you do as we move into 2021?
Adjust Your Strategies . . . . Quickly!
What you may have thought of as a strategic shift that would play out over time, has now become urgent and you must adjust. If you are a retail company, for instance, that was treating e-commerce as a growing side of your business, you will need to rebalance, reduce your inventories, and let go of any unnecessary physical space that’s weighing you down.
- OUTSOURCED CFO
Although every business is different, there are plenty of potential opportunities to increase efficiency. Enjoy the possible cost savings and a bigger pool of talent by tapping into the gig economy and experienced remote workers. Then set clear expectations about performance to keep your productivity in check. A CFO may seem like something only available to large publicly traded companies. Accessing this expertise through a cost effective shared part-time CFO could make the world of difference for your growing business!
Gaps are not always meant to be filled by inventions. Gaps can also be filled with investments!
Watch this space for Part-2 of the blog coming up next week where we cover financial hacks for small business owners in the GTA.
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