Getting Down to Business in Chaotic Times
Perhaps chaos is a bit strong, but today’s business owners are faced with daily news about the new administration’s desired initiatives in the areas of taxes and government spending. Of course, just wanting something does not make it happen in government, but the current domination of Congress and the oval office makes things more likely to become law.
Large hikes in business tax rates, higher income individual tax rates, and capital gains rate hikes are all in play. It can be stressful and business owners may be asking their financial professionals for advice as to actions they can take to minimize the negative impact on their business. Sometimes it is best to wait out the gyrations to see what actually makes it into law. During this time, some business owners are concentrating on their business practicesi and how they may be able to make improvements that translate to the bottom line.
Finances, Income, Facilities, and Expenses
While you are waiting out the governmental gyrations, you can do a financial analysis of your business, marketing, and operations to discover cost-saving opportunitiesii. It is also a great time to do a competitive analysis to see if your pricing is in line or you have room for increases. Other areas worthy of a new look:
- Yours and employee health insurance options and costs.
- COVID-related available funding.
- A P&L analysis, with a focus on cost savings.
- Payment methods: are you taking advantage of customer payment methods to speed up receivable collections?
- If you have outstanding loans, could refinancing reduce your monthly costs?
- Are there opportunities to turn short-term into long term debt or vice versa for financial advantage?
- Post-COVID, will you need the same size office or business floor space? If you are sending employees home to work long term or hiring freelancers, can you downsize?
Every year you should be doing this type of analysis, and good practice during chaotic times, avoiding action based on unsettled information may be good practice.
Customer Service and Feedback
It is always a good time to elicit customer feedback, but never a better time than when business trends are in flux and the markets are in turmoil. Often, customer feedback can provide clues as to how trends will develop out of chaos. Particularly with COVID, will changes or disruptions in how you serve your customers disappear and things go back to normal? Or will there be a new normal? Customer feedback can give you hints.
Use survey forms on your business website, send email requests for survey input, and get in-person feedback from customers in your business. Do not just ask about satisfaction with your products or services. Also ask about any changes in their purchase habits they anticipate due to current events.
When the pressure to act is at its highest, often resisting action is prudent. During this chaotic government and COVID induced period, turning to an in-depth look at your business with an eye for opportunities can be the best course of action.
ii Why It’s Important to Get Back to Basics in Business – PriceofBusiness.com