Small business checklist – Planning for 2023

For most small business owners, this time of the year is dedicated to getting ready for the Holiday rush and ending things on a strong note. However, it’s important to plan for what’s to come. After all, 2023 is just a few weeks away. Having a small business checklist at your disposal gives you a roadmap to follow and helps you take advantage of new opportunities. There are many things you can do to gain a solid understanding of how your business performed in 2022 and help you navigate into 2023.

What to Expect From 2023?

What a challenging year it’s been for consumers, employees and business owners alike. As interest rates continue to rise, inflation remains high and businesses struggle to hire new talent, what can we expect now as we shift our attention to 2023? Overall, the consensus from analysts seems to be that the economy may still have a few bumps ahead in early 2023 before things begin to smooth out.

But it’s not all dark and gloomy days ahead. A recent study from KPMG shows there’s light at the end of the tunnel. With years of navigating a global pandemic, small businesses have become well versed in staying resilient. Although they might be worried about the possibility of a recession in the short term, they’re hopeful for the long-term. Here are a few stats that might leave you feeling more hopeful for the future:

• 83% of SMB owners are optimistic about their company’s growth prospects over the next three years
• 82% are optimistic about their industry or sector
• 78% share a healthy degree of confidence in Canada’s economic growth

Small Business Checklist for 2023

At year-end, it’s always a good idea to take stock of where your business is at, to identify your wins and losses and to plan for what’s to come. Here’s a short small business checklist that we recommend you go through every year to start the new year fresh.

1. Review Your Results From 2022

Firstly, you need to review your business performance from 2022. Were you able to achieve everything you set out to accomplish? Compile some data to identify where you missed or exceeded expectations. In a previous blog, we looked at how to assess the financial health of your small business. Most of the principles in that blog apply here and will help you answer the following questions:

Financial Statements

• Analyze your balance sheet: Where does your business currently stand from a debt perspective? Do you have any assets that you can quickly convert into cash?
• Analyze your income statement: Did your business make money in 2022? How much did it cost to run your business?
• Analyze your cashflow statement: How much cash entered and left your business in 2022? Do you have any leftover cash to invest?

Financial Ratios

• Determine your liquidity: Using current and quick ratios, are you able to pay short-term obligations and unexpected cost that may arise in 2023?
• Determine your leverage: Using debt to equity and debt to total assets ratios, how risky is your financial structure and how much more debt can you take on in 2023?
• Profitability: Using gross profit margin and net profit margin rations, how much money is your business making after expenses?
• Asset Management: Using receivables turnover and inventory turnover ratios, how long does it take to be paid once sales have been made and did you manage your inventory well in 2022?

2. Review Your Business Plan for 2023

This one may seem obvious, but it’s important to identify your goals for the new year and to make any necessary adjustments to your current business plan. Every business owner knows that a well-crafted business plan is an invaluable tool for success. Our changing and evolving economy has brought forward many changes to the way small businesses operate in Canada. As a result, you may need to review some of the processes you currently have in place.

1. Are your company mission and values the same? Have they evolved or morphed into something new? If so, communicate those changes.
2. Given that a recession is looming, should you lower your profitability expectations? Should you invest more in your business or take on more debt?
3. Should you increase your budget in certain areas of your business or make cuts in others?
4. With employee shortages on the rise, should you review your compensation packages to attract new talent? Have you thought about putting diversity and equity goals in place to attract younger talent?
5. What are your competitors doing? Is your industry or sector gaining momentum or going through any major changes?

It’s important to have a clear view of where your business is heading and what to expect from your industry or sector in the future.

3. Planning for Tax Season

Although tax season is a few months away, it’s generally a good idea to start identifying tax deductions and credit opportunities ahead of time. Begin organizing and getting your invoices or receipts ready for Spring now. The CRA has an exhaustive list of common business expenses that are tax deductible. The important thing to understand is that expenses must be incurred to earn your business income, they must be reasonable, ordinary and supported by invoices or receipts. Here are some common examples of operating expenses that are deductible:

• Advertising
• Business tax and fees
• Office expenses
• Business travel
• Business use-of-home expense
• Insurance
• Telephone and utilities

Keep in mind, a qualified accountant or accounting software can do most of the work for you. While keeping track of your financials may feel like a burden at times, doing so will help you run your business more smoothly and make tax season a much more profitable time of year.

4. Look for new Funding Opportunities

Every year, there are a number of new grants and programs that small business owners can tap into on the Government of Canada website. All you need to do is answer a few questions about your business and your future goals, then the system will compile a list of exhaustive results for you.

One grant that’s available to most small business owners is the Canada Digital Adoption Program (CDAP). The CDAP was implemented to support up to 160,000 SMBs with the goal of helping them adopt new technologies while creating thousands of jobs for young Canadians. This $4 billion program was announced in the 2021 budget plan and is positioned to modernize the Canadian economy. Take advantage of these funding opportunities and accept all the help you can get.

5. Create a Content Plan for 2022

When the hustle and bustle of everyday business get in the way, it’s difficult to set aside some time to think about content. That’s why preparing a content calendar ahead of time will save you the stress of having to come up with last-minute ideas. Evaluate which channels are seeing more traffic and are generating more leads to help you understand which content is attracting people to your brand. Among other things, a great content calendar will help you:

• Keep track and allow you to plan for important events in advance that are relevant to your business.
• Keep track of which channels and accounts you plan on posting your content.
• Plan your content in advance and give you enough time to think of creative ideas that represent your brand well.

Content calendars come in many shapes and sizes. If this is your first time creating one, there are subscription-based tools such as Hootsuite or HubSpot. For a budget friendly choice, you can also resort to a simple excel sheet. Alternatively, a quick Google search will help you find a myriad of free templates that can help you get started.

6. Take Time to Celebrate Your Wins

It’s important to reflect on all the progress you have made thus far. As humans, it’s easy to get carried away on what went wrong and what changes to make moving forward. And while it’s important to go through that exercise, what’s more important is acknowledging your wins. Be grateful for everything you have accomplished and the people who have helped you along the way. Customers, employees, and suppliers want to hear about your success. Calling out the positives provides you with a clearer picture of how your business grew and adapted to what was, ultimately, an extremely challenging year.

Building Momentum for 2023

We are closing in on the final bend of 2022 and we know how busy the month of December can be. With one final push and a little business planning, you can build some confidence and momentum to achieve all the success your business deserves going into the new year. Go through some of the items on this small business checklist and you will be guaranteed to hit the ground running in January.