It’s hard to believe that it’s June already. And a lot has happened during the past five months: interest rates increased, a war broke out overseas, cryptocurrency valuations have plummeted, the stock market is teetering up and down, and consumers are starting to realize that money isn’t stretching as far as it used to.

If you’re a regular reader of our blog, you may have been able to brace yourself for the higher interest rates or plan for higher prices; but it’s highly likely that you may not have seen all of these things coming. And these events, in addition to many other unnamed factors, may have impacted your business in unanticipated ways.

So what do we do? (And for those regular readers, you know this is a question that we often pose — and answer!)

1. 1. First, don’t panic. Unfortunately, the major current events listed are challenging; however, please remember that these are not the only things that are going on in the world. Take a deep breath and have faith that everything is going to be OK.
  2. Second, now is the time to start looking at your budget (if you haven’t already) and consider the second half of the year in the context of what happened in the almost completed first half. Are sales where you expected them to be? Are suppliers hitting your key targets in both delivery times and pricing? Have you been able to achieve key financial goals such as gross margin percentage and cash flow for operations? And are the factors that are positively or negatively impacting your Key Performance Indicators (KPIs) within your control?
  3. Third, realistically assess the most likely financial scenario for the rest of the year, i.e. what are the most important metrics to achieve, and then align your business to achieve them. For example, if your goal is to maximize revenue, then craft a plan to get inventory off the shelves and into the hands of your consumers. Or if you want to reduce debt levels because interest rates are rising, you may choose to take cash flow that was allocated for bonuses or additional staff compensation and steer it towards paying down debt instead.

The key thing is at this stage is to make sure that you have your goals in mind to ensure 2022 is a successful year — and channel your energy there. Key Performance Indicators act as your North star(s). You’ll likely have more than one KPI; and in times of anticipated slow downs or softness in your market, financial success can be defined in many ways. So choose your KPIs wisely.

Being a successful entrepreneur means having to lead the team through difficult times and navigating uncharted waters. And being a leader means sorting through background noise and distractions in order to focus on what’s really important for your company. Tough decisions need to be made — that’s what true leaders do. The way that leaders act in challenging times reflects not only on his/her character, but also models the expected behavior and attitude to the company’s employees and team. And anyone — employees, citizens, vendors, even children — will follow you and believe in you as long as they know that they can trust and respect you. Sometimes that means that they may not like you, but leadership often means not being the most popular person in the room (and that’s OK!).

“Tough times never last, but tough people do.” – Robert H. Schuller

Take-away: If you find that you’re behind in your 2022 financial goals and wish to find ways to correct the course, reach out to Scott or Brian at info@acceleratingcfo.com for a free diagnostic.

Brian Califano