3 STEPS TO KICKSTART YOUR BUSINESS FOR THE NEW YEAR

The new year is here. As a business owner, there is a lot to evaluate and prepare for 2022. 

A crucial component to restarting your business is making sure you have a plan of action. Even if you haven’t closed your business, a lot has changed in the past two years. We’ve put together a list of the top steps to follow in order to restart your business.

In an effort to simplify the process, we’ve broken the tips down into 6 categories: 

• Financial review
• Human Resources updates and changes
• Business Planning Tips

HERE ARE A FEW STEPS TO GET STARTED

1. FINANCIAL REVIEW

Meet with your bank

Reopening your business may require additional funding. Banks do not know how your specific business has been affected, therefore communication is key. Don’t surprise them. Arrange for a meeting to discuss your plans, your concerns and tell them the kind of help that you’re going to need to get this process started. 

Plan on telling your bank:

• How your business has changed – how your sales have been impacted.
• How your overhead expenses are going to change as you restart your business.
• What your profit picture is through the end of the year.
• If you need more money, explain why you need it, and how you’re going to pay it back.

Create a cash flow forecast

It’s no secret that cash flow management is a top concern for any type of business. While this might seem like an obvious concept, cash flow problems are a major reason why companies fail, and many owners claim they never saw the problem coming. A cash flow forecast helps any business owner understand what the company needs are as they plan for the future of their business.

Examine your open Accounts Receivable

Contact each of your open accounts. How many of them are not able to pay what’s due? It’s a good idea to talk to each customer and revisit their credit terms. Assure that they’re as strong financially as they were when you first started working with them. 

Reexamine your budget

It’s all too easy for business owners and leaders to focus solely on day-to-day operations (which is definitely enough to consume your time). Therefore, planning for the future, financial analysis, and budget review can easily take a back seat. 

When you’re looking to restart your business, it is essential to cut out time to focus on the future of your business. Analyze your current sales, costs, and expected net income, and project where that might be headed based on your strategic plan. 

Process your PPP forgiveness application

 A 1% loan is a no-brainer in most situations, and not having to pay it back is even better. In order to forgive your PPP loan, it is essential that you fill out the required paperwork. The SBA describes the requirements of forgiveness and how to apply on their site. 

2. HUMAN RESOURCE UPDATES AND CHANGES

Determine your optimum staff level

 If you’ve reduced your staff size within the last two years, it’s important to review how many employees you now need to operate. Examine your operations over the past 3 months and review the utilization rate of your current employees to understand where you may need to hire more people or where some employees can take on more responsibility. 

Inform your employees of changes to hours, pay, or benefits

If you’re reducing staff, benefits, or pay, be upfront and honest. Your employee’s morale is dependent on the transparency you provide. Our recommendation from our experience is to reduce staff once, to the extent that you believe is the minimum amount of employees. Doing layoffs in stages can cause your employees to operate in a fear-based manner, which will likely reduce their productivity. 

Establish a work-from-home policy

Many companies chose to remain remote over the last year. In 2022, some companies may choose to come back in person, either full-time or in a hybrid model. Ensure your company has an established policy, so the process is handled uniformly and is communicated to everyone in an effective manner.

Revise your employee manual

With all the changes that occurred within these last two years, your employee handbook may also need to be changed. Your handbook is your company’s rulebook. Within your handbook, you establish the ground rule by which all your employees are required to follow. 

3. BUSINESS PLANNING TIPS

Evaluate how your business has changed

A business plan isn’t something that you just create when you start a company, it’s a strategic plan for how you’re going to manage and grow over the next 2, 5, and 10 years. 2021 has changed the plan for nearly every business. So it’s well worthwhile to take time to review how your business has changed.

Create a new Strategic Plan

Now that you evaluated how your business has changed, it’s time to create a new strategic plan. This is the playbook for how you’re going to operate in the future.

Understand how your products/services and delivery have changed

Decide what products or services you’re going to phase in or phase out if necessary. Understand the effect on your customers, suppliers, and inventory on the floor. Once you’ve reviewed the effect on your customers, suppliers, and inventory, follow these steps:

• Let your customers know of your changes, along with providing alternative solutions to the changes. This helps you maintain trust in your customer relationships. 
• If your cost structure has changed, update your pricing. Be sure that you give your customers a fair warning of any changes that are upcoming. 
• If you make product changes, make sure your staff is in the know. As a customer, it can be frustrating to find out about changes to products you have purchased without proper notification and explanation. 

Talking to an employment attorney, banker, commercial realtor, marketing expert, and even a CFO can make sure that you make the right decisions with the least amount of stress. 

Evaluating how your business has grown and changed is an important part of starting out the new year. Whether or not your reopening your business, taking a strategic look at your business as a whole can lead your company to more success. As you look at your current companies landscape, you may find that you need assistance from a fractional CFO. Learn why you may need a fractional CFO in one of our recent articles.