The end of the year is a great time to solidify your financial plans for 2022. As a business owner, you should capitalize on this time to make a plan on how to continue to grow your business. If the COVID-19 pandemic has taught us anything, it’s to expect the unexpected. Having a great financial plan in place will put your business in a better position in 2022. Continue reading to learn more about financial planning for your business in 2022.
1. Consider All Possibilities
With seeing how 2020 treated businesses during the pandemic, it is important to plan for multiple possibilities. A few possible events that could happen in 2022 are:
- Life and business continue to get back to pre-pandemic status
- A new strain of COVID causes another lock-down
- High levels of unemployment
Having a plan in place for any of these scenarios can help your business continue to grow.
2. Refinance Your Debt
To recover from the pandemic, many businesses had to take out loans or put expenses on credit cards to stay afloat. Both loans and credit cards can have high interest rates, meaning it will take you longer to pay back your debt and be more expensive. Refinancing your debt can help you lower your interest rate and pay back your debt faster, keeping more money in your pocket.
3. Keep Emergency Reserves
If your business hits hard times, it’s easier to utilize an emergency fund than take out a loan with interest. In a business emergency fund, you want to have from 3 to 6 months worth of operating expenses stored away. This can prevent you from having to dip into your personal savings to cover payroll and other expenses.
4. Lower Your Operating Expenses
Many businesses learned in the pandemic how to continue operating with fewer costs. Instead of going back to the operating expenses you had pre-pandemic, continue operating as if you had limited resources. This way, you can use any extra profit you are making to build up your reserves or reinvest it into the business for growth.
5. Plan Long-Term
While it is important to have short-term plans and goals, the main way to focus on growing and scaling your company is by having long-term goals. Where do you see yourself and your business in 5, 10, 15 years? If you want your business to grow, you need to be intentional. Having long term goals makes growth easier to accomplish and allows you to check in every quarter to make sure you are still on track to meet those goals.
If you need help completing financial planning for your business, contact us at Maven Bridge Capital. Our advisors will be able to assist you in creating the best financial plan for you and your company. Give us a call today to get started.