The future of financing: Are you ready for 2023?
By Bianca C|
February 7, 2023
Personally, we don’t remember the last time a financing article began with a sentence that didn’t resemble something like, “Businesses have faced unprecedented challenges in the past year…” Take it as a sign of the times. Unfortunately, things are not exactly about to look up for businesses in the wake of the headline-hogging challenges which continue to plague SMEs everywhere in the world.
There is some good news, though. While the biggest business trends of 2023 are a little daunting, these challenges are also opportunities for growth and transformation. Fortune favours the prepared, so get informed with this FY24 FYI guide to surviving and thriving in the year ahead.
First, a 2022 recap
Let’s do a brief review of the biggest challenges which impacted businesses last year:
- Post-pandemic shockwaves continue to disrupt everything from talent hiring trends to supply chain management
- Russia’s invasion of Ukraine continues to destabilise global operations
- Technological advances are being made at a blistering pace, forcing businesses to reimagine almost every aspect of their operations
Hmm. Hardly a sunny outlook. Shall we see what 2023 has in store?
Challenge 1: Talent hunting
If 2022 showed business leaders anything, it was that talented employees are proving difficult to track down. Mass movements like the Great Resignation (and its controversial follow-up, “quiet quitting”) have shown that employees are reassessing the place that work takes in their lives.
When you also consider that the emerging talent market is populated by Millennial and Gen Z workers – who are much more likely to job hop than their elders – it’s become a matter of survival for businesses to attract and retain employees.
What’s the solution?
Reassessment and reflection are good ideas here. Young workers in certain industries are seeking out modern workspaces and a healthy company culture. That looks like flexibility (do you offer hybrid or remote work opportunities?) and diverse and value-oriented workforces.
Challenge 2: Inflation and an unstable supply chain continue
Unfortunately, experts report that businesses can expect ongoing inflation and subdued economic growth in 2023. The same supply chain issues which had their terrible birth during the early stages of the pandemic have only been exacerbated by destabilising factors like Russia’s invasion of Ukraine.
In case anyone was wondering what the effects of the war have been on the supply chain, here’s a brief overview of what’s been going on:
- Russia’s systematic destruction of Ukraine’s agricultural infrastructure has disrupted the entire supply chain
- Ukraine and Russia are major exporters of fertiliser, which has created significant uncertainty for global food and grain production
- Gas and oil prices have shot up, which has spelt trouble for the EU (which imports a big chunk of its energy sources from Russia) and had a disastrous knock-on effect on other commodity prices
- Port shutdowns, rerouted ships, port congestion, and associated delays have led to steeper commodity prices and a container shortage
As long as the conflict continues, businesses can expect more of the same.
What’s the solution?
Prevention is better than cure in this case. To protect the business from volatile market pricing, various shortages, and rising logistical costs, you’ll need to map out your entire supply chain to identify potential weak spots. Then, you’ll need to construct protective measures to deal with the potential fallout.
“I’ll just get my crystal ball out,” you may be grumbling to yourself. Fear not – if you haven’t the slightest idea of how your supply chain (or just The Supply Chain) volatility is going to impact your business, just make sure you have the right financial facility to pad against the unforeseen and the unforeseeable.
Challenge 3: Supercharged digital transformation
Digital transformation is a sly beast – at one moment it might enable all sorts of wonderful possibilities for business and, at another, it could pose a threat to your very industry. Part of its chameleon nature has to do with the fact that advances in the tech which make digital transformation necessary are happening at a blinding pace.
Some of the technologies which businesses need to contend with (either as competition or as a solution) are AI, the Internet of Things, virtual and augmented reality, cloud computing, blockchain, and 5G. If that weren’t enough to absorb, these systems and processes are beginning to enable and empower each other, creating “intelligent enterprises” which can collaborate to execute menial tasks with extreme efficiency.
What’s the solution?
The rapid gallop of tech advancements is going to force businesses to find new solutions for augmented working, business decision-making, and re-skilling or up-skilling employees to work best alongside their new teammates. That’s right – you’ll need to think about what a “hybrid workplace” looks like in more ways than one.
The only way to eliminate the threat of AI and its compatriots is to consider them as allies. In what ways can the business implement this technology to maintain a cutting edge instead of fading into redundancy? Fortunately, this kind of thinking relies on the (currently) human skill of creative, lateral thinking.
Future-proof your financing with Bridgement
No matter what the financial year has in store for your business, Bridgement can future-proof your finances quickly and simply. Access a simple term loan, a revolving credit facility, or invoice financing (and more) within 24 hours.
No application charges. No hidden fees. Just accessible business funding when you need it, plain and simple.
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