by Jean Miller | Accounting News, Business Growth, News, Newsletter, Small Business
Running a small business in 2025 presents both challenges and opportunities. To stay ahead of the competition, you must adopt a proactive approach to planning and execution. By focusing on the following strategies, you can set your business up for success this year and beyond.
Reevaluate Your Business Plan
Your business plan is the foundation of your company’s success and should constantly evolve as a roadmap for goals and strategies to help grow your business. Take time to revisit and update it, reflecting on changes in the market, industry trends, foreseeable challenges, and your company’s current position. Define clear objectives and align them with your long-term vision. A well-structured business plan effectively guides your daily operations and long-term decisions. The start of a new year is an ideal time to reexamine your company’s progress and milestone markers—and shake things up if you’re not meeting goals.
Stay Informed of Market Trends
Staying informed about market trends and customer needs is essential. Conduct regular market research to understand your audience’s evolving needs and monitor competitor activity. What have your competitors done to up their game? Have they introduced new products or improved customer service? What is the plan for your company in response? Additionally, take a proactive approach and look for opportunities for growth and adaptation. Use tools like Google Trends and industry reports to gather insights, enabling you to identify market gaps and stay relevant in a fast-changing environment.
Control Cash Flow Efficiently
Cash flow is the lifeblood of any small business. Create a detailed budget and regularly monitor expenses. Utilize accounting software to track income and outflows in real time and follow up on delinquent invoices. Establish a cash reserve for emergencies, optimize inventory management, and consider renegotiating payment terms with suppliers to maintain a steady flow of funds.
Leverage Technology
Technology can simplify operations and improve efficiency. Explore tools like customer relationship management (CRM) software to enhance client interactions, project management platforms like Asana and Trello to boost team productivity, and Paychex Flex to help streamline payroll and benefits. Automation tools can also save time on routine tasks, freeing you to focus on growth opportunities.
Empower Your Staff
Your team can be your greatest asset. Offer opportunities for skill development through training programs and workshops. Encourage open communication and provide regular feedback. Investing in your employees helps to build loyalty, boost productivity, and cultivate a collaborative work environment.
Focus on Marketing and Networking
Marketing is crucial for driving growth and attracting new customers. Aim to develop a multi-channel strategy that includes content marketing, email campaigns, and paid ads. Focus on your website’s search engine optimization (SEO) to improve visibility and build a social media presence to engage with your audience.
Additionally, as valuable as an online presence is, networking is still highly beneficial to growing your business. Attend industry events and conferences, join local business groups, and actively participate in online communities to build relationships that can lead to valuable opportunities.
Set Specific and Realistic Goals
Success requires clear and actionable objectives. Set SMART goals—specific, measurable, achievable, relevant, and time-bound. For example, aim to increase sales by 15% over the next quarter or onboard five new clients within three months. Create a plan and break larger goals into smaller tasks to stay focused and motivated. Remember to track your progress, adjust your goals as needed, and celebrate milestones and achievements as you go.
by Jean Miller | News, Newsletter, Small Business
Navigating the financial landscape is paramount for small businesses to thrive, but there are ample opportunities for errors that can hinder success. In this article, we’ll go over key strategies that small businesses can implement to sidestep common mistakes and achieve financial stability.
Prudent Budgeting
Effective budgeting is the foundation of sound financial management for small businesses. By creating a comprehensive budget that accounts for both fixed and variable expenses, you can gain better control over your finances and allocate resources strategically. Regularly review and adjust your budget to reflect changing circumstances and priorities, track expenses, and review financial reports to ensure that your business remains on track financially.
Build an Emergency Fund
Unforeseen expenses and economic downturns can pose significant challenges for small businesses. Building an emergency fund provides a financial safety net, which will help to weather unexpected storms without jeopardizing business operations. Aim to set aside a portion of business revenue each month into a dedicated savings account, gradually accumulating a reserve that can be tapped into during times of need.
Monitor Cash Flow Closely
Keep a close eye on your cash flow by consistently monitoring incoming and outgoing funds. This helps to identify financial red flags early on, such as cash flow issues, decreasing profitability, or unforeseen expenses, so you can combat these issues before they get out of control. To optimize cash flow, implement strategies to accelerate receivables and delay payables where possible. Additionally, consider leveraging digital tools to streamline invoicing, payment processing, and financial reporting.
Diversify Revenue Streams
Relying heavily on a single revenue source can leave your business vulnerable to market fluctuations and industry disruptions. Diversifying your revenue streams can help mitigate this risk and create a more resilient business model. Explore opportunities to expand your product or service offerings, target new customer segments, or expand to adjacent markets to diversify your income sources.
Negotiate Favorable Term
Effective negotiation can result in significant cost savings and improve your bottom line. Whether it’s negotiating with suppliers, contractors, or landlords, don’t hesitate to advocate for your business’s interests. By securing favorable terms and agreements, you can reduce expenses and enhance profitability.
Invest in Technology
From accounting software to customer relationship management (CRM) systems, investing in technology tools can help automate repetitive tasks, improve decision-making, and empower your team to work more effectively. Invest in technologies that will address your business’s specific needs and produce tangible benefits.
Seek Professional Guidance
Don’t hesitate to seek guidance from experts like accountants, financial advisors, and business consultants. These professionals can offer valuable insights, expertise, and strategic advice tailored to your specific business needs. Whether you’re seeking guidance to optimize tax strategies, create a growth plan, or navigate complex financial regulations, their assistance can be instrumental in helping to avoid pitfalls and ultimately achieve financial success.
by Daniel Kittell | Accounting News, News, Newsletter, Small Business
The impact of inflation on small businesses is typically significant, often squeezing profit margins and jeopardizing long-term sustainability. Amid this challenge, small businesses are finding innovative ways to navigate these turbulent economic waters. In this article we explore four strategies that are proving instrumental in helping small businesses stay afloat.
Tap into Savings Reserves
One of the primary strategies small businesses are using to endure inflation is tapping into their savings reserves. By building a financial safety net during calmer economic periods, businesses create a cushion that allows them to maintain operational stability, cover increased costs, and avoid making knee-jerk decisions that could have long-term consequences.
However, this move isn’t one to make lightly. Business owners should first assess the severity and duration of inflationary trends before dipping into cash reserves. It’s a delicate balance between preserving the business’s financial health and addressing immediate challenges. Additionally, businesses need to come up with a strong plan for replenishing these reserves once economic conditions balance out.
Raise Prices
According to a recent poll released by the accounts payable software Melio, half of the businesses polled increased their prices to offset the rising costs of labor or supplies. Many of these businesses reported a price increase of 7% in the last six months. To implement a price increase strategy effectively, businesses should conduct thorough market research and competitor analysis. Understanding how similar products or services are priced in the market can provide insights into the best pricing strategy.
Reduce Production of Goods or Services
Inflation often leads to increased costs of raw materials, labor, and other operational expenses. Because of this, small businesses may choose to reduce the production of goods or services in an effort to maintain profitability. It might seem counterintuitive, but it can be a strategic move to uphold quality and protect the business’s reputation.
Cutting back on production allows businesses to focus on delivering a limited but high-quality offering. This can be particularly effective for businesses with a niche market or those that underscore craftsmanship and exclusivity. By maintaining a respected and high-quality reputation, businesses can weather the storm of inflation without compromising the long-term sustainability of their operations.
Increase Online Presence
A strong online presence will help small businesses mitigate the impact of inflation by opening new avenues for sales, reducing dependence on local economic conditions, and providing opportunities for reaching an international customer base. An effective online strategy – through e-commerce platforms, digital marketing, and social media engagement – allows businesses to connect with a broader audience and provides valuable insights for adapting to changing market conditions.
The four strategies discussed above are all essential components of a comprehensive approach to navigating economic uncertainty. By carefully implementing these strategies, business owners can position their businesses not only to survive but to thrive in the face of inflationary pressures.
by Pete McAllister | Accounting News, IRS, News, Tax, Tax Planning
Filing taxes puts stress on small business owners, because most know that mistakes on business tax returns can affect your business’s success. Here are some common tax mistakes to avoid.
Mixing Business and Personal Expenses
Be sure not to report personal expenses on your small business’s tax return. It’s always a good idea to have separate credit cards, bank accounts, and filing folders for each. Sometimes an expense isn’t as cut-and-dry and you may have difficulty determining if it is indeed business or personal. In this case, turn to the IRS’s Publication 535 at www.irs.gov, which provides an overview of expenses that are and are not deductible.
Being Disorganized with Recordkeeping
This may seem like second nature to some business owners, but staying on top of tax documents, receipts, and copies of bank and credit card statements will go a long way toward avoiding overwhelm at tax time. While you don’t need to submit receipts or other proof of tax deductions to the IRS, you will need them on hand if the IRS decides to probe into your taxes further. If you get audited and you don’t have required documentation on hand to prove any claimed deductions, your tax bill could increase significantly.
Filing the Wrong Tax Forms
There are different types of tax forms required for different types of businesses (C corporations, S corporations, etc.), and if you have employees, you’ll need to fill out additional forms that document their payment through the year. Simply put, it can be a lot to track. A tax advisor can help you determine which forms you should be filling out.
Taking Too Many Deductions
Simply stated, taking deductions means that you get money back for certain purchases that assisted your business. Just keep in mind that too many deductions could raise a red flag for the IRS. If you’re unsure, a tax advisor can ensure that you’re adhering to deduction limitations and only claiming expenses that qualify.
Forgetting or Underestimating Your Tax Payments
Many small business owners are required to make quarterly estimated tax payments. Typically, the deadlines for these payments are the 15h of April, June, September, and January of the following year. How much you owe is based on your income. If you miss a payment, or if your payment falls short of your actual tax liability for the year, the government could saddle you with penalties, thereby increasing your tax liability. Furthermore, if the IRS suspects an intention to defraud it, the fine can be as high as 75%, and you could face criminal tax fraud charges.
by Stephen Reed | Accounting News, Business Growth, News
After weathering the storm of the Covid-19 pandemic for the past two years, small businesses are facing yet another significant challenge: rising inflation. While small business owners can take solace in the fact that they’re not facing this challenge alone, it can be difficult to come up with a game plan to hedge against inflation. Below we’ll go over some top tips to help you do just that.
What’s Driving Inflation?
Inflation is a sustained increase in the price of goods and services, and it weakens the purchasing power of currency. In the US, demand surged once the economy re-opened post-pandemic lockdowns, and Americans were eager to spend money they had saved, including government stimulus checks. At the same time, we started to experience supply chain issues as a result of Covid-era policies. This put pressure on the supply-and-demand flow, with supply falling exceedingly short of demand. Rising oil prices, which lead to rising gas prices, are also to blame.
Media coverage on inflation tends to center the consumers, but the challenges posed to small businesses can be even greater, including:
- A loss of money due to rising supply costs
- A slowdown of incoming invoice payments as clients struggle with their own financial hardships
- More hurdles to access funds as financial institutions often tighten borrowing requirements for the duration of higher inflation
These challenges force the small business owner to either absorb higher costs or raise prices for the consumer. However, there are inflation protection measures that can help to alleviate this dilemma.
Use Automation to Increase Productivity
If it’s possible to automate certain daily tasks, do it. Tasks that make the most sense to automate include those that are repeatable and don’t take a lot of brainpower to complete, including:
- Email
- Contracts
- Purchase orders
- Invoices
- Inventory
- Shipping
- Sales and marketing
Automation cuts down on errors, simplifies processes, and enhances customer service. There is a plethora of apps available to help you, from implementing basic bookkeeping to boosting client care, ramping up marketing, and more. You may be using some of these apps already, but be sure you’re taking full advantage of the features they offer.
Cut Expenses
Reduce costs wherever you can. Cancel any services, subscriptions, and products your company isn’t using. Also consider looking into alternate materials, products, or ingredients that may be less expensive and will help ultimately save money. Something else to think about: Is transitioning to a hybrid remote/in-office model that would give you the opportunity to downsize your office a possibility for your business?
Tackle Debt
If you have any residual funds from the Covid-era stimulus packages, now is the time to use those to pay down high-interest debt, especially as interest rates are expected to keep rising. You may not be able to wipe out your debt completely, but try to cut down at least the principal amount. Decreasing how much you pay through lowering interest rates can aid in protecting against inflation.
Additionally, don’t discount trying to renegotiate loans or lines of credit with your lender in order to lower interest rates. Doing so will allow you to save money, which you can put into savings reserves.
Lower Your Supply Chain Risk
Your business is going to be susceptible to supply chain disruptions. To further protect against inflation, lower your supply chain risk by:
- Organizing backup supply chain options
- Exploring domestic substitutes for overseas suppliers
- Storing stockpiles of essential supplies for the least possible storage costs
Raise Prices Strategically
Even if you’re automating processes and cutting expenses, sometimes price increases can’t be avoided during periods of high inflation. Always keep a pulse on what the competition is doing, and be careful not to raise prices too quickly. Pricing yourself above the market without a strategic approach could lose customers.
