The holiday shopping season is now in full swing, and small businesses throughout the greater Philadelphia and Delaware region are looking to tap into consumer spending to fuel their businesses’ financial success in 2023 and beyond.
In fact, the new WSFS Bank Small Business Trends study found that small business owners and managers are optimistic about their revenue in the coming year, with 83% expecting their revenue to increase or stay the same despite the effects of inflation and rising costs.
As we head into the early stages of 2022, here are some ways to position your small business for long-term success and financial health.
Keep moving forward—with a plan
Despite being optimistic about their future, only 43% of small businesses surveyed across the Mid-Atlantic region believe the region’s economy will improve over the next six months, and even fewer (34%) are confident about the U.S. economy.
However, 76% are optimistic that their business will still be in business a year from now, which is great news. It also means that nearly one-quarter of small businesses surveyed have no plans to operate, underscoring the importance of short- and long-term planning for any business.
With inflation still strong and the cost of everything from business supplies to employee health care rising, financial strategy planning is critical. Talk to your banker and accountant to develop and launch a plan that works best for your business.
Build customer loyalty
The holidays are a time of year when many businesses see an increase in gift card sales, often bringing in additional post-holiday traffic to small business retailers, restaurants and experiential services like 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 ready to offer loyalty programs to new customers using gift cards and keep the program running throughout the year to keep existing and new customers coming back to buy 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 within the next year. Now is a great time to make this investment in your business to maximize an effective tax write-off through Section 179 of the IRS tax code.
The purchase of certain categories of equipment or software for your small business in the last quarter of the calendar year allows you to apply a tax credit of 100% of the cost of the equipment purchase to the profit for the year in question. This allowance applies to new and used equipment and includes computers, office furniture, certain types of work vehicles and business equipment such as pizza ovens.
These types of loans can often 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.
Whichever approach is best for your business, always remember to consult with your banker, accountant and tax advisor to ensure that your plan is in place and is regularly reviewed and adjusted as necessary as the current economic environment evolves.
Candace Caruso is Senior Vice President, Chief Retail Lending Officer at 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’s Closing Bell, The Wall Street Journal and Franchise World.