Tips for Entrepreneurs to Succeed in 2023
Over the past few years we have experienced an unprecedented amount of economic disruption. Beginning with the ramifications of lockdowns as a result of the Covid-19 pandemic in 2020, from supply chain issues to the Russo-Ukrainian conflict it has seemed like we — and by extension businesses — have not been able to catch a break, and unfortunately that trend looks set to continue in 2023. With rising interest rates and record-high inflation, murmurs of a recession have grown even louder over the past few months, and challenging funding rounds, the recent sell-off in equity markets, and significant lay-offs have given us just a glimpse of what the downturn may have in store this year.
However, it is important to not let the doom and gloom of 2023 predictions be disheartening. I founded my company in 1980 in the midst of the so-called “double-dip” or “W-shaped” recession with a negative net worth and severe undercapitalization, and have navigated it through a number of recessions both large and small since. On the contrary, I have found that times of economic downturns can be some of the most advantageous for the smart entrepreneur. The best entrepreneurs are those who thrive during times of uncertainty, viewing disruptions as a challenge rather than an obstacle. Some of the greatest innovations come out of the necessity to adapt and change. Our company culture was formed in the crucible of crises, and we have maintained that intensity ever since.
That being said, there are certainly considerations entrepreneurs can take into account in the new year to perform well in the face of the upcoming challenges. Based on what I have observed in terms of the economic climate and knowledge I have picked up in my 40 years of experience owning and operating a company, these are the tips I believe will be most helpful for entrepreneurs to succeed in the new year.
Audit your financial standing and standard operating procedures
While we can never truly predict what the future holds in terms of the markets, the past few months have felt particularly unknowable due to the continuous rate hikes consistently keeping things in flux. As a result, many investors and lenders have been playing the “wait and see” game, pulling back and averting risk as a result. While this doesn’t mean that entrepreneurs should give up any hope of obtaining outside funding, they should adjust their expectations in terms of how easy it will be in the coming year.
A recession is not an ideal time to be in debt. I have come to find that down-business cycles are usually the best chance to put balance sheets to work. Whether you are just starting out or have been in the business of entrepreneurship for a number of years, now is the time to audit the books and ensure you have the cash reserves to buoy you. Doing a thorough review can not only help you identify wasteful spending and other ways in which money may leak out, but also serve as a good exercise to get in the habit of doing. Regardless of who you have handling your books, as the founder and head of the company it is important you have a strong grasp on the finances of the business.
Additionally, take the time in the new year to review your processes as well. When grinding away and trying to create the growth necessary to build a business, processes that seem necessary at the time can become superfluous in the long run. Identify what is sustainable and what needs to be retooled, if not immediately then in the future. Maintaining efficiency is one of the cheapest and most effective ways an entrepreneur can sure-up their business for unstable times.
Start a dialogue with clients and suppliers
If it feels like your head has been on a swivel trying to navigate the past few years, remember that consumers are feeling the same. The needs of your business have likely shifted, and it would be naive to assume that the needs of your customers have not also changed. Research has found that the greatest percentage of businesses fail because there was no market need for the product they were providing, and it is important to ensure during times of change that you are still building a company that fills a necessary gap in the market.
Similarly, suppliers and other partners in your company are surely feeling the same pressures you have felt — practically every business, for example, from corporates to startups, has been forced to re-learn the lessons of supply chain management. 2023 is the time to over communicate, learning what the expectations, needs, and desires of your stakeholders are directly from the source.
Find and retain good people
As an entrepreneur myself, I understand perhaps better than anybody the temptation to carry everything on your own shoulders for as long as possible. Your business is your responsibility that you have already invested a considerable amount of time and money into, so it can be scary taking anything off your plate and handing it to somebody else. However, whether we are in a bull or bear market, it is important to find, hire and retain good people.
The past year has brought about what is being termed as “The Great Resignation,” as a record number of people have been voluntarily leaving their jobs. While this economic trend could decline if a recession occurs, as it currently stands unemployment remains near historic lows, meaning great candidates have options and the market for good people is very competitive. Amongst the many other hats you need to wear as an entrepreneur, you must become an excellent recruiter.
Perhaps even more important than finding top talent is retaining it. As the job market is currently a competitive space, communicate with the people on your staff about their needs, how to ensure they are happy and fulfilled in their position. This way, when recruiters inevitably call them, you can rest assured that they will politely decline. I have found that giving your team members a strong culture and purpose is one of the most effective ways to keep employees around for the long haul.
Do not let fear of the future alter your plans for growth
Ultimately, I believe perhaps the best advice I can give entrepreneurs when it comes to navigating a recession is to not allow the fear of it paralyze you. Instead channel the uncertainty to energize you and your team. Yes, these are uncertain times and we do not know exactly what the future will hold. Some are saying that by the second quarter of 2023 things will have stabilized and are optimistic about the rest of the years. Others are less so. In today’s day and age if a company isn’t growing it is shrinking, so hold your head high and work to utilize what you have to the best of your ability.
Entrepreneurs are risk-takers by nature. Remember that you have already embarked on the biggest risk of all — starting a business — and allow that knowledge to help you keep a cool head through the new year and all of the challenges it will inevitably bring. It takes determination and incisiveness to build a business from the ground up, and the best of us will laugh in the face of turmoil, transforming uncertainty into an asset that will carry us through.
Connect with Stephen Bittel on Facebook and his personal website.
