As we begin 2025, small businesses will face a number of challenges that could impact success.  Most of those are due to rising costs from inflation, potential tariffs, and other drivers.  Others arise from the difficulty of putting your best face forward to increase sales and market share.  And yet others will arise from workplace issues including employee expectations, on the job injuries, and the challenges of managing employee performance.

Managing rising costs.  There is no question that rising costs can significantly impact your bottom line, and because of that it is vitally important to take steps to make sure that you are aggressively managing your business costs.  To that end, the following should be considered:

•  Diversify your supply chain, and include both foreign and domestic produced products.  While overseas suppliers have often been attractive, the imposition of tariffs could make domestic suppliers more attractive.  Failing to pre-emptively diversify supply chain vendors could leave you scrambling if overseas prices suddenly rise.

• Invest in energy-efficient technologies.  Look at technology investments with an eye on reducing, or at least slowing the increase in energy costs incurred by your business.

• Regularly evaluate your business’ expenses, and reduce or eliminate any waste.

• Make sure you are properly insured against unexpected risks.

Manage your cash flow.  Late payments can disrupt your cash flow, which in turn can create difficulties in paying operational expenses and increase financing costs.  That could affect your financial stability, ability to obtain needed financing, and make it difficult to grow.  To lessen the impact of late payments, invoice regularly and quickly, send timely reminders that payment has not been received, make it easier to get paid by offering varied payment methods, and review and improve invoicing protocols, assess interest on late payments, and institute credit control policies.

Retain existing customers and find new customers.  Finding new customers can be hard.  It is even harder if your company does not have much in the way of brand recognition and online presence.  Nonetheless, there are things you can do:

•  Work on recognizable branding in your market through the use of logos, trademarks, catch phrases, and other measures.

• Highlight your expertise and past successes in your online presence, whether that is your website, LinkedIn pages, or other social media.

• Actively network within your industry.

• Encourage your customers to refer potential customers to your business.

• Make sure no one employee controls any customer relationship.

• Focus on the customer’s value proposition, and your customer service.

• Consider e-commerce through a easy to navigate, mobile friendly website.

Workforce issues.  There is a lot of buzz these days about the lack of employee loyalty, lack of flexibility in the work place, shifting employee expectations, and other things that drive employee satisfaction.  The challenge in the next year will be to keep a workforce that values working for your company.  With that in mind, savvy employers will do things such as making note of and improving the culture of the company, create opportunities for advancement with clear cut objectives, increase the transparency of worked hours among non-management employees, and invest in employee satisfaction.