Tips for Managing Business Finance during Economic Uncertainty in Canada

There’s no doubt that 2022 was a turning point for the world economy. The economy didn’t grow as much as it could have because central banks tightened their monetary policies and raised interest rates to bring down inflation.

In 2023, the unpredictability of the economy will likely affect many different aspects of our life. The insecurity of jobs, unstable markets, rapidly increasing prices for products and services, and difficulties in supply chains continue to be regular topics in the news, all of which are constant indicators that a potential recession may be on the way.

Even though the economy has been looking bad in recent months, Canada can still avoid a recession. But the economy will grow less than it could, and there will be a lot of doubt in 2023.

Innovative marketing leaders know they cannot stand still in these challenging times. To survive after this economic cycle, you must focus on your brand. Here are some managing business finance tips for economic uncertainty

Reduce your Expenses

• In times of recession, your company may need to cut spending, which could lead to reductions in staff.
• You can also operate remotely instead of renting a space to avoid having too much cash connected to inventory and storage expenditures and decrease inventory spending.
• Just-in-time (JIT) ordering saves time and money by ordering items only when needed.
• If you have good relationships with your suppliers, you can bargain.
• Use free social media marketing.

Find more ways to bring in money

Increasing a company’s sales and finding new sources of revenue can help it achieve a higher overall revenue total. 

 A company can grow its revenue by expanding its customer base, persuading existing customers to make further purchases, enhancing its marketing approach, providing prices that are competitive with those of similar businesses, and fostering strong relationships with its customers.

Here are a few tips to increase your sources of income,

• Market Study of Customers

To learn more about your customer group, you might want to ask them about their age, gender, and revenue. This lets you make goods and services that are just right for each customer. Find out about the latest business and food trends.

• Bring in more products or offerings

One way to increase sales from each current customer is to let them buy other products that meet their needs. You can think about other things that a customer might buy to use with your goods as well as services that your customers might need.

• Polish your pricing strategy

You can make more money by rethinking your pricing approach while keeping the same number of sales. You might sell more if you cut your prices and take some of your competitors’ market share. Sales may increase if you offer a subscription service and remind users to buy new things. Coupons and discounts let customers try new goods for less money, which makes them more loyal and likely to buy again.

• Become known for quality and knowledge

You could increase your brand’s image or your staff’s knowledge. Give customers value in several ways to develop a positive reputation. For business-to-business sales, joining industry organizations and attending their events helps boost your image.

Establish a Safe Cash Reserve

Sales and earnings are not cash flow. Positive cash flow occurs when income goes above expenditures. Negative cash flow can kill a business. By tracking their income and expenses, businesses can save for unexpected economic events, late payments, and capital needs.

A business can pay its suppliers, agents, and employees on schedule if it has enough cash flow. This will help your employees in challenging circumstances. Cash flow increases your chances of getting a more significant credit line or better loan terms, making loan repayment more manageable.

All firms face problems. To recover quickly from an economic downturn, they require solid cash flow and easy access to finance.

Get the Assistance of an Accountant

Accountants have vast expertise. They’re your best asset for the early detection of problems. Accountants manage budgets. Teams must update budgets as the economy changes. Budgets will help you survive an economic downturn. Accounting professionals will help other groups follow plans by reviewing and explaining findings.

Alarming facts can’t guide decisions. The last few years have taught us that reliable data fast can make or harm a firm. Let your finance team automate routine tasks. Monthly bank reconciliations, notebook entries, and report preparation can be automated. Your team can then deliver essential financial knowledge for future decisions.

Spend Money on Technology

It seems that more people use technology when times are tough. The first reason to consider digital transformation before or during a recession is that better analytics can help management understand the business, how the recession affects it, and where operational improvements can be made. Your business can be more open, fluid, and productive with the help of technology.

Prices go down because of digital technology. “Self-funding” transformation attempts include things like decisions that are made automatically and based on data. IT spending makes businesses more flexible and better able to deal with the uncertainty and rapid change that come with a recession.

Digital technologies make it easier to change products, change quantities, and move the supply line around the world.

Canada’s Uncertainty Protection for Business

During economic instability, the Canadian government has implemented several programs and rules to protect businesses. Some of these are the Canada Emergency Rent Subsidy (CERS) and the Canada Emergency Wage Subsidy (CEWS), which help businesses pay their rent and keep their workers by giving them money.

Conclusion

Small businesses can also get low-interest loans for running bills through the Canada Emergency Business Account (CEBA). Tax relief measures like putting off payments and extending filing deadlines have been implemented to make it easier for businesses to pay their taxes. Institutions like Export Development Canada (EDC) and the Business Development Bank of Canada (BDC), which the government runs, have also given money and financing choices. When the economy is terrible, Canadian businesses are protected by sector-specific support programs, institutional freedom, and more money spent on research and innovation.