Inflation, supply chain issues, customer expectations, technology transformation, and cybersecurity are all hot topics that can – and will – affect your business in the coming year. You need to make sure that any expansion strategies are well thought out with these trends (and challenges) in mind. Taking time to develop a plan of action based on this year’s successes and next year’s forecast will help ensure even more success in 2023 and beyond.
Inflation is a major concern for businesses of all sizes, but the common tendency to implement sweeping cuts in expenses or headcount — which can lower morale among the remaining team members—is likely not the appropriate action for the coming year. Instead, consider developing a scorecard to determine organizational priorities that factor in ROI
on current market values, cash operating cycle (the time it takes between purchasing inventory to collecting cash from the customer), and risk assessments for vendors and customers (e.g., supply chain considerations and ability/ likelihood to pay). Be sure to include any data points that are particularly relevant to your business or industry.
Another key piece to keep your eye on through the coming year (and beyond) are
the Federal Reserve’s policy announcements and meeting minutes. Businesses (and stock markets) are often caught off-guard when new policies are implemented, but you can stay ahead of the curve by reading up on their latest meeting minutes and transcripts.
Additionally—and this may seem obvious, but it’s certainly worth mentioning—be sure you fully understand your capital structure; financial plans that have been successful in the past may be risky going forward. Be prepared to restructure.
Supply chain management is a critical part of any business; a recent survey by SAP (a technology leader in supply chain management) found that “business leaders say their current supply chain issues primarily stem from global political unrest (58%), lack of raw materials (44%), and rising fuel and energy costs (40%). Only 31% cited inflation as a major contributor.”
No matter which category you would cite as your primary supply chain concern—it’s important that you have a clear picture of your entire value chain. Assess the risk of disruption for any and all subcomponents and the supplier that provides them, and then research alternative sources that can be leveraged if needed.
Remember that the global climate is constantly evolving (geopolitically, economically, and environmentally), so revisit these risk assessments on a regular basis and update your policies accordingly.
Technology will continue to change the way we work—as they have been in recent decades; the latest changes include:
• Artificial intelligence (AI) – which frees up employees for higher-value work. As more processes are automated, less time will be spent on data entry and report writing. This will allow you to focus on more complex projects that require creativity and human interaction—like developing new products or services.
• Machine learning (ML) – which allows computers to identify patterns in data without human oversight independently. This will provide you with the data to make the decisions that matter rather than wasting time compiling the data and looking for the patterns yourself.
• Virtual reality (VR) – which can simulate processes for training purposes or test new designs in lieu of physical prototypes. With this, you will be able to exhibit successful models before they invest in a final product—providing your stakeholders with peace of mind.
In fact, facial recognition is quickly becoming a popular means by which to deliver personalized service to your customer. From billboards that recognize a viewer’s approximate age, gender, and mood to deliver a more relevant ad, to retail boutiques using technology to identify customers in the store so that sales reps can offer more personalized recommendations—all of this means that if you want to be a leader in your industry, you’ll have to be willing to go all in on curating each moment and touchpoint for your customers.
Part in a parcel of personalized experiences is offering your customer more control over their purchase journey; this means you’ll need to leverage these technologies to deliver consistent experiences across multiple channels and devices.
CYBERSECURITY & PRIVACY
Cybersecurity and privacy are key considerations for every business. You need to protect your customers’ data, but you also need to protect your business and your employees. These can often seem like separate issues, but they’re all part of the same overarching priority: safeguarding your business in the digital era.
One of the biggest challenges is that it can be unclear as to who you should turn to for help. Often, businesses assume that their IT teams (whether internal or outsourced) are security experts—and that employing those teams is enough to keep the business safe. But now there is an ever-growing list of privacy laws and regulations (GDPR, CCPA, CPRA, and many more), standards for best practices (NIST, ISO 27001-02, etc.), and technology tools available that far exceed the scope of some of the best IT teams.
The good news is that there are information- and cyber-security experts and resources you can leverage to meet the commercially reasonable levels of security that are required.
TRACK THE TRENDS
By heeding these market trends and strategies, your business can not only weather the coming recession but enhance the customer experience and increase your market share as well.
And lastly, don’t be afraid to ask for help from experts who can be an extra set of eyes— looking out for opportunities for improvement and growth. It can take a village to disrupt an industry.
Marijane Kantzabedian is a senior manager at Miller Kaplan, a top-100 CPA firm. She specializes in financial statement audits for private companies and exempt organizations in the technology and service-oriented sectors, radio, and television, as well as start-up organizations. Learn more at millerkaplan.com