2023 – What Does It Hold For Your Business?

By Hilary O’Dwyer, CEO, Titian Consulting

Happily, most of us have had a bit of a break over the holiday period and may still be in go-slow mode and not yet back at our desks or making the magic happen for our businesses. While we are in the summer phase, it’s a great time to reflect on what is ahead in the coming year. With the speed turned down on the day to day for a lot of us, I have been reflecting on the first half of the financial year and looking ahead to the second half and what that is going to look like for my business and that of my clients.

I think it’s clear we have a lot of headwinds coming our way this year. We are bombarded in the news about the cost of living increases. I know the price of our weekly shopping bill has already gone up but we are yet to feel the impact of the hike in energy costs. Couple this with the endlessly increasing interest rates for mortgages, there is mounting pressure on the family budget. 

Experts are betting that there are another two rate rises ahead this year before a pause and then possibly the rates starting to go down again. But that’s 12 months away at best. Additionally, many households have been on fixed rate mortgages, which will switch over to variable rates during this year. They have been cushioned by their fixed rates and haven’t felt the impact of the 300 basis point increase yet.

We need to consider what this means for discretionary spend and if or how that impacts your business. That is why now is a great time to review your numbers for the last six months and have a look at the next six to 12 months. Things to contemplate are:

  • How solid is the top of your sales funnel
  • Are you at risk of sales dropping off dramatically with the climbing economic pressures
  • What can you do that will alleviate any drop in revenue or unforeseen issue
  • How is your cost base looking – is there flexibility to reduce it if things take a dip
  • Do you have any legacy debt – are you at risk of default if things take a turn for the worse
  • How sensitive is your business to small macro changes

Having a handle on your current position and looking at some scenarios for the future will give you some confidence about how to move through the year. You will be able to tweak your plan as things eventuate. Being proactive is half the battle rather than being reactive and feeling caught out if things start to take a turn for the worse. Speak to your CFO or advisor about how you’re placed for 2023.

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