The end of the year is fast approaching, and as a small business owner, it’s time to look forward to your financial plan going into 2024. Whether you’re a sole proprietor or a corporation, it’s important to get ahead of the game. Here are a few tips to help you plan out your financial success in the next year.
Reassess Your Budget
It may have been awhile since you last examined how you’re spending your money. While setting a budget is one of the best steps toward financial success, it’s also critical to continue to revisit and adjust your budget as time goes on and things change. Take some time to address your budget and where your financial priorities lie — perhaps funds that you’re putting towards one thing might be better spent on other resources and vice versa.
Invest in Growth and Increase Revenue
Another way to plan out a successful 2024 is to look for ways to improve processes and become more effective and efficient. For example, new product development strategies, technological innovation, expanding your talent pool for hybrid or remote environments, and diversifying your marketing approach can all have an impact on your business even as costs of goods and services rise. Placing a focus on both the internal and external vision of your company will ultimately result in greater competitive advantage, even if upfront investments can seem like a big commitment.
Additionally, increasing revenue can come in many different forms. You can acquire new customers, but you can also place emphasis on retaining existing ones. In fact, studies show that it can be six to seven times as expensive to gain a new customer than keep a current one. On top of that, finding ways to expand your marketing initiatives, product offerings, etc. can help increase your revenue.
Tackle Debt as Much as Possible
Debt can be a looming shadow, but the more you chip away at it, the more you set yourself up for better financial health. There are two common ways to think about repaying debt — one is called the snowball method, and the other is the avalanche method.
The snowball method is where you pay off debts smallest to the largest. Focus on paying off your smallest debts first and making minimum payments on your larger debts as much as you can. Once your smallest debt is paid off, you move on to the next smallest.
The avalanche method is about focusing on paying back your debts that have the highest interest rates first and simultaneously making minimum payments on the rest with any leftover funds. Depending on your situation, one of these methods may work better than the other. Either way, paying off debt as best as you can ultimately improves your cash flow and overall financial health.
If you need assistance with preparing financially for 2024, call 800-526-9127 to speak with one of our bankers today! We are here to help at Republic Bank. Plus, visit our library of resources for more helpful financial tips.