While there are many areas that executives must address when it comes to business planning – such as hiring, which is becoming more challenging as the economy opens – one focus must be on financing. Without money, businesses can’t do much, whether it’s expanding to meet demand, paying down debt that’s been incurred over the last two years or becoming a more sustainable operation.
For many businesses, 2022 will be a year of starting anew and investing in new projects and ventures. Here are some priorities small- and medium-sized businesses may want to be focused on – all of which will need some sort of financing – in the year ahead.
Consolidate debt
The COVID-19 pandemic spurred a borrowing binge. The Canadian Federation of Independent Business calculated that 70% of Canadian small businesses took out a collective $135 billion in loans in 2020 to help tide them over during the pandemic – an average of $170,000 per company. With government assistance programs winding down, now’s the time for companies to clean up their balance sheets. Consider consolidating small and often high-interest debt under a lower-interest line of credit or term loan.
Push your growth plans
With interest rates still at all-time lows and demand for goods picking up, now’s the time to execute on your growth plans. That might involve acquiring a rival that’s suddenly for sale, purchasing new equipment to expand capacity, entering a new market or launching a marketing campaign designed to accelerate revenues. Whatever you do, though, don’t wait to push your plans forward – otherwise you might fall behind your rivals.
Boost productivity
There’s no time like the present to invest in an innovation-boosting digital transformation. While many small businesses were forced to create e-commerce stores, online reservation capabilities and ordering and delivery systems during the pandemic, now’s the time to push your digital evolution further. Consider investing in a customer relationship management or enterprise resource planning solution, or another digital tool that can help you generate better data analytics and run a more efficient operation.
Develop new lines of business
The pandemic has given a lot of companies clarity over what areas of businesses they should shed and what areas they might want invest more in. As people start spending again, you should be developing, honing or expanding those new products and services, and pursue branches of business where demand seems insatiable. It may take time and money before these investments pay dividends, but if you’re convinced of the upside, then success should follow.
Become more sustainable
Here’s the kind of extra-credit transformation that will pay dividends soon: get an energy efficiency audit and look for ways to shrink your carbon footprint. With a PwC report finding that 80% of consumers want to buy products from a company that stands up for the environment, becoming more sustainable is a must. Reducing your energy use will not only help you save money on your fuel and utility bills, you’ll also be able to position your business as a green leader among your customers and your industry.
Find a financing partner
Funding all these priorities requires working with a financing partner, such as the Fonds de solidarité FTQ, a Montreal-based financial company that’s helped more than 3,400 partner companies expand. It has a host of financing solutions, all of which are geared toward small- and medium-sized businesses, including unsecured loans, venture capital funding, private equity financing and more. In the 2020–2021 fiscal year, the company made $1.1 billion worth of investments in the Quebec economy.
The Fonds does more than invest, though. It also, as it says, “gets invested.” With more than 50 investment professionals, expertise in 20 sectors and access to people who are trained in market analysis, legal issues, taxation, labour relations, due diligence and asset investments, its companies can get the key advice they need to succeed.
While it’s always important to find a strong financing partner, it’s even more critical in the year ahead. Businesses that want to set themselves up for post-pandemic success need to invest in their company before it’s too late.
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