During the last two years, businesses have faced many struggles and were often forced to cut corners wherever they could just to stay afloat. However, business never sleeps, and you always need to be a few steps ahead of your competition. Besides looking ahead, you should also occasionally revisit your previous business plans. In this article, we will take a look at 8 financial New Year’s resolutions for 2022.
1) Calculate your net worth
Running a business might feel like you are constantly on a treadmill. There are very few moments to stop and reflect on how things are going. It can be constructive to just draw a line in the sand and realize what you have to work with. Unfortunately, unlike personal finance, getting an accurate estimate of your company’s net worth can be a bit more complicated. Thankfully, there are plenty of financial calculator tools and services available online to help you add up and subtract your assets and debts. Knowing exactly where you stand should be an annual financial New Year’s Resolution that can help your business stay financially healthy.
2) Review your business goals
Once you know where you are, you should start thinking about where you are heading. Take a look at the financial goals you have set for the year, and see how far you have progressed. Assess whether you can reach your business targets without going over budget. If you realize that things aren’t exactly matching up as well as you had hoped, it might be time to request professional guidance to help you achieve your business goals.
3) Schedule regular financial meetings
Most businesses will require annual meetings, but you can make it one of your financial New Year’s Resolutions to hold meetings more often. You can frequently hear talk of quarterly reports. Still, if your business is going through a particularly turbulent period, there is no reason why you can’t hold financial meetings monthly. Approach financial planning with both short and long-term goals in mind. If something isn’t working and your company is hemorrhaging money, you shouldn’t wait for the next quarterly review to find out about it. Have agile mechanisms in place which will allow you to make quick course corrections to your business strategy.
4) Plan to deal with inflation
Inflation is a terrifying topic for many businesses, and no one seems to have a good answer on how to deal with it. Of course, you’ll be able to find deniers who choose to ignore the situation. However, we suggest that you don’t attempt to delay dealing with inflation until the last possible moment. There is a huge tidal wave on the horizon, and the question isn’t whether it’s going to hit us or not; it’s rather – when can we expect to face the impact?
Unfortunately, you can’t do much to stop inflation, but you can prepare for it. Your business can try to protect its wealth by diversifying its assets. Avoid risky investments, and look to stable forms of securing your current funds. Some traditionally risk-averse strategies have proven to be good hedges against inflation in the past. You can consider investing in real estate or natural resources and try to set up a sustainable business plan.
5) Manage your debt
If you want to secure additional funding for your business, you may consider taking on some debt. Most businesses need to take out loans or find other ways of providing their starting capital. It’s relatively common to arrive at a situation where your company requires a cash injection to make certain unplanned purchases. However, what’s important is that you have a good plan to manage your debt. Review all of your company’s debt, and focus on repaying the loans with the highest interest rates first. You can hire professionals to help you with your bookkeeping and give you advice on refinancing options.
6) Work on your credit rating
For your business to take out loans, you’ll first need to make sure that you have a good credit rating. Your credit score will influence the level of interest you’ll have to pay and the types of financing options you will have available. Always try to be fiscally responsible and meet the deadlines for all of your payments. By getting your accounts in order before the deadlines expire, you can avoid penalties for your credit score.
7) Reduce operating costs
Over the course of the last two years, many businesses have adopted hybrid work models. This has allowed them to explore previously unavailable strategies for saving money. If most of your employees are working from home, you can reduce your operating costs by moving to a cheaper or smaller venue. Of course, if you have a lot of office inventory, you will probably need to look into storage solutions. However, you can try to make it more affordable by cutting storage costs and selling off some of the items you won’t be needing. You can also re-evaluate all of the services and subscriptions your company is paying for and try to see if you can eliminate some of those expenses.
8) Set reminders for tax dates
It’s never too early to start thinking about your tax reports. Preparing tax reports is time-consuming, and many businesses put it off and then end up frantically trying to file their taxes in time before the fiscal year. Unfortunately, that approach can lead to missed deadlines and mistakes in your reports. You can hire professional tax preparers to make sure you avoid late fees and are eligible for refunds. Regardless of who will be taking care of your taxes, it would be wise to set reminders in your calendar several months in advance.
The Bottom Line
Taking care of your business finances is the best way to ensure that your company is ready to meet any challenges that it will meet in the future. We’ve given you a list of 8 financial New Year’s resolutions for 2022, which can serve as inspiration and guidelines for your business goals.
DISCLAIMER: The information contained in this article is for general informational purposes only and should not be construed as legal advice. You should not act or refrain from acting based on any information contained herein without seeking the advice of an attorney.