For those that have had growth, companies have more cash than ever before. They have more orders than they can even fill. These companies are in a stable financial state, and their biggest opportunities will be capitalizing on that growth.
They need to think about how they can lower costs and impact the bottom line. Will they continue to expand their services and operations to meet customer demands? Or will they use market share to exit their businesses?
The potential disruptors are that companies continue to face difficulties in the labor market. Workers do not want to work in ways they have before. They aren’t interested in just doing a job to make a small wage.
Companies are having to pay workers more to do the same job. Therefore, businesses are finding new ways to compete and offer jobs that are different than those a few years ago.
Businesses are continuing to work through how to raise labor costs while also protecting the bottom line.
In addition to the labor market, supply chain continues to be a disruptor. Businesses are constantly searching for new vendors so they can get supplies faster and, in some situations, at all.
The main regulation continues to be tax law. Many of our businesses face a tax burden each year.
With some of the proposed U.S. changes to international taxes, some companies could bring business back to the U.S. At this current date, it is proving more difficult to make business decisions based on tax law.
Not only is the federal government looking for additional funds, states are as well. They have operated in a deficit for years, and many are looking to draw individuals to the state by minimizing the state tax impact. States are discussing lowering rates, phasing out portions of the income tax, and a modification to sales tax.
This is different from the state methods prior to COVID, where all states wanted to raise rates to increase revenue. So going forward, if a business wants to continue to grow and see the results it did in the past, it must challenge its traditional thinking.
For example, what routine tasks does an employee perform daily or monthly that can be automated? This would allow the team member to do more valuable tasks, and it would provide increased work satisfaction.
Businesses also must consider what should be outsourced. The workforce today wants a different experience than employees did even five years ago.
The old cliche of “a job is just a job” doesn’t work anymore, and business owners need to examine company culture to secure future success. Also, in the discussion of doing things differently, companies need to look at their current processes. Are there task and business processes that can be eliminated?
For many businesses, there are significant challenges, as well as opportunities. It is important in this environment that businesses choose the right person or team as a partner to ensure success.
Contact us to find out the best strategies for taking advantage of those opportunities.
Mary Kathryn Allen is a partner at HORNE and specializes in tax compliance and business consulting for publicly and privately held clients, as well as state and local tax compliance. She joined the firm in 2011.