Eight key tasks you need to work on to get 2023 on the right track

Now that you have had a chance to have some downtime and to relax over Christmas and New Year it's the perfect time to turn your mind to the year ahead.

For 2023 there are a few key things I think we all need to be doing to make sure we are as best prepared as we are able. Some of these may seem to be simple but nonetheless, they are all important.

Here’s my list:

  1. Repay debt asap – with interest rates at likely 7%+ for 2023 it's time to get your debt down as much as possible and as fast as possible. If that means selling a few assets for less than you may have got a while ago then so be it. It's not going to be a time to be beholden to your bank.
  2. Fix your interest rates if you have not already.
  3. Review all your costs. Go through them line by line. What costs can you remove?
  4. Have a good look at your staff. There are some that you simply can't afford to lose and some that you may wish to, noting that if they go who will you replace them with, and will they be any better? It’s a great time to reward your good staff but to actively seek to replace poor performers. This may take some time, but quietly start looking for better staff and be prepared to pay well for top people.
  5. Look at your working capital. Businesses have grown fat working capital having gone from just-in-time fulfilment to just-in-case. This also applies to debtors. Look hard at all aspects of the lock-up in your business and start improving it. It will release cash.
  6. If you are investing be patient. The days of 20%+ annual returns are gone. It's now about the return of capital rather than the return on capital. I always get nervous when junk-grade bonds start to be offered by advisers as a means to get better returns. Review your asset allocation ( SIPO) and make sure you understand your risk profile. The ride will be bumpy for a few years yet so you will have to take a longer-term view and be patient.
  7. Prices for goods and services need to be regularly reviewed. That does not mean annually. This is, however, a tricky exercise – put them up too much and you may lose sales, but don’t put them up and you will be going backwards.
  8. Its also a great time to look at your customers and suppliers. Who do you work well with and make money from and who is difficult? Are there opportunities to grow sales channels, or to get better terms from suppliers?

When times are good and profits come freely, businesses and their owners tend to get lazy and not do the careful and detailed housekeeping that is necessary. Now is the time to go old school and get lost in the weeds.

2023 will be a good time to look at opportunities and to work on your business and not in it.

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Our Team - Nigel Smith