The holiday shopping season is in full swing, and small businesses throughout the Philadelphia and Delaware region are looking to capitalize on consumer spending to propel their businesses to financial success in 2023 and beyond.
In fact, a new WSFS Bank Small Business Trends study found that small business owners and managers are optimistic about their earnings next year, with 83% believing their earnings will increase or stay the same despite the effects of inflation and rising costs.
As we approach the start of 2022, here are some ways to set your small business up for sustainable success and financial health.
Keep moving forward – with a plan
Despite being optimistic about their own future, only 43% of small businesses surveyed across the Mid-Atlantic believe the region’s economy will improve in the next six months, and even fewer (34%) are confident about the U.S. economy.
However, 76% are optimistic that their business will be up and running in a year, which is great news. It also means that nearly one-quarter of small businesses surveyed do not expect to operate, underscoring the importance of short- and long-term planning for any business.
With inflation still high and the cost of everything from business supplies to employee health care rising, developing a financial strategy is critical. Talk to your banker and accountant to develop and implement a plan that works best for your business.
Build customer loyalty
The holidays are a time of year when many businesses see a spike in gift card sales, often driving additional post-holiday traffic to small business retailers, restaurants and services such as escape rooms. This is also a great time for special deals and offers, and tying them to a gift card is often a great way to generate additional revenue for your business.
Be prepared to offer loyalty programs to new customers using the gift cards they received as gifts, and continue throughout the year to keep current and new customers coming back to purchase your products and services!
Reinvest now for 2023 rewards
The WSFS Bank Small Business Trends study also found that 45% of small businesses plan to purchase equipment in the next year. Now is a great time to make this investment in your business to maximize the powerful tax write-off through IRS Section 179.
Purchasing certain categories of equipment or software for your small business in the last quarter of the calendar year allows you to apply a tax deduction of 100% of the purchase price of the equipment to your income for that year. This exemption applies to new and used equipment and includes computers, office furniture, certain types of work vehicles and equipment for commercial use, such as a pizza oven.
Often these types of loans can be approved and funded within days, allowing you to move quickly before the end of the year to not only improve your business, but also add additional cash flow in the process.
Whichever approach works best for your business, always remember to consult with your banker, accountant and tax advisor to ensure your plan is in place and regularly reviewed and adjusted as needed as we navigate the current economic environment.
Candice Caruso is Senior Vice President, Chief Retail Lending Officer, WSFS Bank. She has more than 20 years of experience in the financial services industry, including 12 years as a business finance expert, and has been featured on Bloomberg Radio, CNBC Closing Bell, The Wall Street Journal and Franchising World.