Small businesses recovered in 2021 compared to 2020 performance, but what does 2022 hold in store for small business owners? Supply chain, employment issues, and inflation are all certainly concerns for small business owners this year. How can you prepare your business for the 2022 challenges? Here are small business tips for 2022 small business growth.
2022 Small Business Challenges:
- Supply Chain
Are Supply Chain Issues Going to Remain a Problem in 2022?
Almost everyone has heard about supply chain issues at this point. Many small business owners are struggling to keep pace with consumer demand, and the supply chain will continue to be an issue in 2022. Some experts expect supply chain problems to resolve by the end of 2022, but you should expect them to remain for the bulk of your 2022 year.
Employment Issues in 2022
A survey conducted by the US Chamber of Commerce shows the difficulties of hiring that small businesses are facing. About half of the actively hiring respondents are struggling to find qualified applicants. Further, these businesses are competing with others for top talent and have open positions remaining unfilled. Employees of small businesses often report having a close relationship with the owner and a sense of belonging as top perks of working for small businesses rather than larger companies. Ultimately, increasing pay and bonuses to current and potential employees will be necessary to attracting and retaining top talent.
Is Inflation Going to Be an Issue in 2022?
In 2021, almost 75% of small businesses reported inflation as negatively impacting their financial health. Inflation will remain a problem in 2022, but experts are suggesting it will not be as bad as inflation in 2021. Some of the inflation problems are due to the strained supply chain, so a normalized supply chain will ease the inflationary issues for small businesses.
Small Business Financing in 2022
Are small businesses going to have enough cash on hand to grow in 2022? According to a study by the Federal Reserve Banks, an overwhelming majority of small businesses faced financial struggles in 2020. 29% of small businesses made a late payment or did not pay due to financial hardship. Late payments or no payments on overdue invoices will remain a problem in 2022 as well.
How to Plan for 2022 Small Business Growth:
1. Update Your Business Plan
Planning for 2022 small business growth starts with updating your business plan. You should do this annually, so if you have not done this yet, start now. Your business plan will outline your goals and what you need to accomplish those goals. This includes financing, defining your market, and emphasizing big picture goals for your business.
2. Break Goals into Smaller Tasks
Next, while growth may be your goal for the year, set smaller goals for yourself throughout the year. Break your large goals down to measurable and attainable activities so you can stay on track. If there is a massive shift in the flow of business, you will be able to adjust your smaller goals to accommodate for it. Building out a good business plan includes flexibility built into the plan.
3. Set Deadlines
Set and stick to your deadlines. It is important to stay consistent when you are growing your business. Things will fall through the cracks, and this can slow or stop your growth if you are not careful. Keep these deadlines realistic along with your yearly goals.
4. Start Now
Once you have your 2022 goals and a business plan in place, start growing! There has been a lot of volatility in small businesses and larger businesses due to COVID and related issues. It is not a bad idea to build your cash reserves while you focus on growing your business. One way you can do this is through alternative financing. If you can improve your cash flow debt-free, you can grow your business without adding expensive repayments to your budget.
Need Financing for Your 2022 Small Business Growth?
Do you need better cash flow to reach your 2022 goals? Eagle Business Credit offers small business funding services like invoice factoring. Invoice factoring is easy to qualify for and factoring facilities grow in line with your business. This means that as your sales grow so does your funding line. With a financing plan in place, you can focus on your 2022 small business growth and not on collecting unpaid invoices.