The business landscape has changed over the last three years. Businesses, both big and small, have learned how to adapt in a global pandemic. As we enter year three, the world still seems a bit uncertain, but businesses continue to grow. The new ways in which we conduct business has allowed many new doors to open, and many to close. Those who have shifted business models have found solid ground again, even with an influx of new competition. Adaptability is the key to any businesses’ success. We also find this to be true when it comes to continuing the quest for increased valuation of your business as you prepare for future transition.
Challenges
One of the biggest challenges business owners face is chain shortages. Beginning at the start of the pandemic, this shortage caused a ripple effect and some businesses have yet to recover. Industries like automotive, construction and manufacturing have been heavily impacted by supply chain disruptions and are still trying to lessen the impact. These supply shortages resulted from factory shutdowns due to the virus. Many industries that rely heavily on technology, like semi chip conductors, have begun building their own multibillion dollar manufacturing facilities in the US to reduce the impact of a massive supply chain disruption again. As business owners navigate these challenges, it is of the utmost importance that attention is focused on keeping the business operating at its top capacity. Addressing opportunities for growth in new operations, flexibility in mindset, and most of all attention to financial implications, we can ensure the health of the business remains as challenges surround it.
Labor Shortages
Supply chain shortages and labor shortages have gone hand in hand since early 2020 when the pandemic began. Today, almost one-third of small businesses have open positions they are unable to fill. These positions are open for months at a time, and nearly double the amount from a year ago. To attempt to combat this labor shortage, businesses can offer employees increased wages, more flexible hours, performance incentives and on the job training. This is necessary to not only nurture relationships with current employees but also to attract new, quality talent. While small business owners seek employees to fill the gaps in employment, it is important that they focus on developing their current team. Investing in employees is crucial for the long-term success and succession of their business. Because of the shortages, both labor and supply, business owners have been challenged to think critically by making radical shifts in their day-to-day operations while remaining profitable and scalable. Mike Snider, the President and Founder of Transworld Business Advisors - Cleveland West, explains, “we often discuss with business owners how to develop and invest in their employees and management for the long-term, as they are often the largest asset of any business. We call this Human Capital in the business. It is one of the intangible assets in the business and a critical piece to ensure preparation for a transition, whether it is a sale or ownership succession change.”
Have a Back-Up Plan
At Transworld Business Advisors - Cleveland West, we know that if there is one thing Covid has taught small business owners, it is to have a backup plan. While many small businesses in Cleveland have relied on PPP loans and government support to get through the coronavirus pandemic, these are not resources that can be relied on for the future. Monetary support like a rainy-day funds, available line of credit, or a few months savings can help with operating expenses and ensure businesses are not without options; however, it is also important to remember that the business must function within ideal parameters to achieve consistency and stability. Working with a Transworld Business Merger & Acquisition Advisor can assist in preparations related to long-term business growth and planning. Mike Snider of Transworld Business Advisors – Cleveland West adds, “One of the things the supply shortages have exposed is that businesses need to have supplier options. If you have one or two sources, you need to add three and four new supplier alternatives.”
As the last three years have shown, even in chaos, businesses grow. While construction is one of the most impacted industries as far as supplies go, they also experienced a huge increase in business growth. There was a 58% increase in requests for home professionals in June 2020 alone, and those requests have not halted. Construction companies are a notable example of a business who might benefit from a small business loan to stockpile supplies in case of future interruptions. For those looking for booming markets in which to invest, home services and construction continue to be ideal candidates for business acquisitions. Transworld Business Advisors Cleveland West team will help you find other acquisition opportunities within growth industries.
Leaning on Trusted Advisors
It is crucial to have a network of trusted advisors around every business. Trusted advisors are willing to listen, offer help, and give solid feedback on future business plans. Partnering with seasoned professionals, like those at Transworld Business Advisors - Cleveland West, can be a relief when it comes to business and exit planning. Other partners like CPAs can help businesses with the important tax implications that come with investing in current and future events. All in all, your Transworld Cleveland West team is here to help you as you navigate planning for your future.
Businesses can overcome any challenges on the path to success. Those who have remained flexible, acquired resources, and adjusted their trajectory to reflect the future of the workplace will find success in a post pandemic world, but those who fail to adapt will find themselves struggling to get back on their feet. By having the right management team, financial partners, and advisors in place, Transworld Business Advisors of Cleveland West team can advise business owners how to overcome any challenge that might get in the way of their path to success, especially as they plan for their next chapter.
