Your Business Finances in 2023
I don’t have a crystal ball. And I can’t predict the future.
But there are some things I do know about what is coming in 2023 based on the current direction of our economy. And none of it looks pretty.
Inflation has been at an all time high for the past year and it’s not going to suddenly go down.
Thanks to government spending and the printing of money to pay for that spending, inflation has spiked. And normal inflation which comes from increasing costs of goods and services is still a factor.
All that to say, inflation is going to continue to impact the economy and business finances well into 2023.
Less Disposable Income
With inflation and increased cost of living comes a decrease in disposable income. A factor we are beginning to see, even now, is the reduction of unnecessary spending in low income households.
While it starts by affecting low income households, it will begin to affect middle class households very soon. Many local businesses depend on people being willing and able to spend money on non-essential items.
More IRS Involvement
Last year saw the largest increase to the IRS in decades. The number of agents that have been added is a sign of increased focus on small businesses and increased audits.
Expect to pay more in taxes or to be stuck dealing with surprise audits as the government attempts to crack down on errors in filing and those who evade payment.
Preparation is Essential
Local businesses fail first.
When the economy suffers, the mom and pop style stores will bear the brunt of the problems as they don’t have the resources to spread out the losses.
Survival requires preparation. You have to start making decisions now if you don’t want to get caught off guard by increased financial hardships.That’s where a review of your current financial situation can be extremely helpful.
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