By Fernando Berrocal

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After nearly two years of pressure to respond against the COVID-19 pandemic, supply chain challenges, shortage of manpower, and other issues, now is the best moment to be a proactive entrepreneur and make the upcoming year (2022) the most successful year yet for your startup.

Don’t wait until the first quarter to figure out what you need to do to make the next upcoming year your most successful. From securing financing, to cutting operational costs. As specialists in helping startups achieve their greatest potential, we propose that our readers consider the following sooner rather than later.

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Securing Debts: If you need to secure your debt, now is the best time to do it. Inflation is predicted to rise in the upcoming months, possibly even reaching 7%. Businesses must begin securing loans before interest rates rise due to upcoming inflation.

Make sure you're prepared for Tax Season: Tax planning tactics implemented ahead of time can help you save money. Purchase any tax-deductible business products now in the fourth quarter to reduce your tax liability when you file your 2021 tax return. If you purchase these products now, you will be able to deduct them from your taxes, resulting in a smaller tax bill. Other suggestions include determining if you qualify for the home office deduction, which many people who worked from home in 2021 did. If your accounting is out of date, you should seriously consider hiring an accountant to help you prepare for filing taxes and working with your tax consultant.

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Financial modeling and planning can help you get over the growth barrier: Budgeting is a critical component of growth. Without it, you risk running out of money or wasting your limited resources in ineffective ways. Your budget will assist you to determine if you can hire additional workers and will also highlight any business deficiencies. It will also be useful when contacting investors and lenders since it will allow you to demonstrate if you are on course to accomplish your goals.

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Evaluate your Chief Financial Officer (CFO): Your CFO should do a lot more than just keep the accounts. They have had to develop and adapt as organizations seek to incorporate more technology into their everyday operations. Technology has been a major emphasis for CFOs, allowing them to depend even more on data to influence business strategy and decision-making. This means the CFO should be able to transform real-time data into insights, be knowledgeable about data security, and focus on big-picture innovation.

Verify if your team is in a favorable position: Due to labor shortages, cutting operational costs, including letting employees go, during COVID may result in your workers running on empty and/or being approached by competitors offering greater compensation. Though there is no one-size-fits-all solution for creating a desirable culture, consider if working remotely or from the office is best for the team, continue to encourage a sense of community, and create a feeling of fun.

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Understand your revenue drivers and Return on Investment (ROI): Make sure, for example, that your sales investment is worthwhile in terms of ROI. As the cost of sales and marketing rises, the ROI for organizations that pay for these services will decrease. Businesses will need to account for the change in income as shipping prices continue to rise. Furthermore, if shipment times drag on, income will take longer to arrive. Finally, forecast every quarter, looking at whether suppliers, vendors, team members, and customers are generating income and/or delivering too little ROI.

Every dollar, quarter, and employee mean a lot in a startup business. As we look ahead to 2022, we expect that obstacles that are now posing a challenge for startups, such as labor shortages, supply chain challenges, and rising material prices, will be addressed. Rather than reacting to market fluctuations regularly, set aside time at the end of the year to evaluate what is and isn't working for your business, so 2022 might be your most successful financial year yet.

Ready to bring your startup to the next level? Apply to MassLight’s next batch. MassLight supplies capital and a dedicated tech team. We take equity in return. Have questions? Refer to our FAQ page.

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