I always joke with my wife and kids that my decades-old-clothes (some might say vintage) are now back in style. In my mind, I think I am a fashion visionary — in reality, I am a frugal person who does not realize that he is out of touch with what the cool people are wearing these days. Given this, I do find it mildly amusing that certain business trends that were current are now yesterday’s news.
Consider the following recent articles that have been published in mainstream outlets:
- Business owners and CFOs alike are addressing the remote workforce issue and whether compelling employees back to the office is going to result in another series of resignations or more employees begrudgingly coming back to the office.
- Mergers and acquisitions activity has declined by over 40% during the past twelve months as companies look to spend on technology and cut expenses to maintain profitability.
- Supply chain issues that were prevalent at the start of 2020 have largely dissipated, resulting in excess inventory levels and slowing demand for many raw materials and finished goods.
So it appears that some of the impact that the pandemic had on the business environment over the past couple of years is starting to fade to black. What does this mean for the business owner seeking to maximize his/her operating results during the remainder of 2023?
- Continue to exhibit financial discipline. When you started the year, you created a budget for what you wanted to accomplish and have been tracking results against your updated forecast. Keep doing what you are doing — keeping a scorecard never goes out of fashion.
- Be conservative in spending. We are always attracted to the bright new shiny ball or the newest technology trend. Before you make a significant spending decision, make sure you perform a return-on-investment (ROI) calculation on the project and confirm that you will be earning a positive value. Making an impulsive buy for that Hawaiian shirt on QVC at 2am never turns out well.
- Assess staff productivity. Similar to those two-sizes-too-small pants that you don’t want to get rid of, there may be some employees or staff that are not pulling their weight. As you enter the last third of the year, it is important to take stock of what value your key employees and consultants are bringing to the table and assess if tasks can be redistributed or outsourced to allocate some cash flow to more productive internal projects and ventures.
As we enter the dog days of summer, it is time to realize that we need to maintain our focus on the core values of our business and what we want to accomplish. There are always going to be things that impact our business operations as well as our societal norms and values. But what cannot ever change is the approach to financial analysis and the need to truly understand where your company is headed — and if an adjustment or two is necessary to achieve your goals and objectives. A clear and analytical mind never goes out of style, and it is important to objectively look at your operating key performance indicators (KPIs) to truly assess how to make 2023 a fruitful and profitable year.
Take-away: If you want to learn the newest trends in accounting and finance for the SMB community, reach out to Brian or Scott at firstname.lastname@example.org.
Co-founders & Managing Partners