Author: Gavan Ord, Senior Manager of Business Policy, CPA Australia
It has been another difficult year for Australian businesses. Alongside carols, gifts and roast spuds, here are 12 steps for the 12 days of Christmas that business owners and managers should prioritise to get ready for 2023.
Supply chain difficulties will continue to be front of mind for businesses in 2023. It’s important to look at ways to spread your risk. Consider multiple sources and countries along your supply chain so you can minimise disruption. Avoid being trapped in the hands of one critical supplier or customer and analyse your contracts closely.
2. Get cyber secure
Cybersecurity has made the news multiple times this year due to high-profile hacks at Medibank and Optus, among others. Make sure you’re doing everything you can to avoid your data being compromised. Review the information you’re collecting and how it’s stored. Speak to the professionals to make sure your cybersecurity is up to date.
3. Anticipate price rises
The Reserve Bank, federal government and leading economists all expect prices will increase in the year ahead. Businesses should explore ways to improve their cashflow. Think about techniques to improve your profit by focusing on high-margin sales and controlling costs. CPA Australia has a toolbox of resources available for businesses looking at ways to manage in a high-cost environment.
4. Prepare for higher interest rates
With inflation likely to keep rising, most economists are expecting interest rates will climb. If your business is holding a significant amount of debt, you should be planning now for further rate rises. Ensure you are able to afford future increases and consider refinancing, or paying down debt, if you can.
5. Get disaster-ready
After three years of intense rain and flooding due to La Niña, it’s clear businesses need to have natural disasters in mind when preparing. The end of the year is a good time to take a good look at your risks, exposure to weather events and insurance. Don’t limit your focus just to high rainfall events and think more broadly about long-term concerns, including droughts.
6. Energise your business
With energy costs continuing to rise, all businesses should be considering what they can do to reduce this cost. From replacing old appliances with energy-efficient alternatives to installing solar panels, there are options available. At the very least be aware of what your bills might look like should electricity and gas costs increase.
7. Review your customer base
The end of a calendar year is a great time to have a look at your customer base. Review the way you communicate with those outside of the business and check out the competition. With prices rising, it’s possible customers will start to cut back. You need to have a clear look at whether your products or services hold up in a spending downturn.
8. Improve your technology
Small and medium businesses in Australia are digital laggards among their Asia-Pacific peers. You can easily give your business an edge by bringing in productivity-boosting technology. This could include automation, AI or cloud computing.
9. Incentivise your employees
Australia, and the world, are facing a major shortage of skills. This can make it tough for small and medium businesses to compete, particularly on salaries. Think about what you can offer employees to retain them and how you can differentiate when hiring. Whether it’s increased flexibility, training or a genuinely good culture — all of these benefits have value.
10. Seek professional advice
As we head towards the end of the year, businesses should speak with their advisors. It’s an ideal time to take stock and plan for future events. Professional advice can be a safety net for small businesses in difficulty. Advice can also help unlock future growth opportunities.
11. Have a mental health break
The ongoing pandemic, global instability and economic difficulties are creating hard times. Our members are telling us the outlook continues to be uncertain for businesses. Make sure you take the time to check in with yourself and focus on your mental health.
Predictions are often wrong but forecasting is a useful exercise for businesses of all sizes. You should be thinking carefully about what might happen in 2023, how this could affect your cash flow and what you can do to prepare. Put a strategy in place to protect your business and, where possible, grow and take advantage of opportunities.