What Bad Credit Small Businesses Should Prepare for in 2014

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A new year is always bittersweet, as we say goodbye to both the failures and successes of last year and look towards what can be an intimidatingly blank slate. What makes this new year even more intimidating for small business owners, in particular those with bad credit, are issues that have either created problems after the fact, such as the tightening of underwriting criteria for small business loans on the part of major banks, to speed bumps that may have not yet made their full impact felt, such as the new costs for certain businesses associated with Obamacare.

Small business owners should diversify their income streams. What we learned from 2013 is that if you rely solely on one source of income, you might be left in an extremely uncomfortable position if it is taken away by unforeseen circumstances. For example, many contractors who counted the US Government as their biggest client (and for others, their only client)  were blindsided by the catastrophic government shutdown, which put all of their contracts with the Government on hold indefinitely. Having another source of income to round out your small business’s primary function can safeguard against the unexpected, which nowadays should be expected as a matter of course based on recent historical examples. At the very least, the creation of an emergency financing plan that can give your business capital in the event of a major issue is a prudent move.

Be proactive about your healthcare policy. A major shaker of small business confidence is the Affordable Healthcare Act, which is generally poorly understood, and suffered even more due to a botched portal roll-out. Instead of griping about the potential changes to their businesses and doing nothing, small business owners should organize themselves, learn as much as they can about what they actually need to change, and prepare to meet any new regulations head on. The risks of complacency include being hit with fines for non-compliance. All business owners owe it to themselves and their employees to figure out what is needed from them in order to handle their healthcare requirements.

Think carefully about hiring. While hiring on the part of small businesses saw an increase in 2013, it was a small increase, indicative of caution on the part of business owners who are cautious about the economy and financial commitments. Small business owners should think very carefully if they are planning on hiring, as the size of their business will determine where they fall in terms of healthcare obligations. That being said, if your business is ready to grow, it might be a good time to consider hiring as each year, more graduates enter the job market, saturating the market for talent and driving down the costs of many types of new hires.

Look at the patterns of last year. The patterns that your business experienced this past year can give you more insights on what went well and what went wrong. Even dips in revenues caused by external issues, like natural disasters or Governmental fumbling, should be looked at carefully, as this data can give you ideas how to prevent similar issues in the future. Ideally, this year your business will be stronger and wiser from the trials it has faced. Here’s wishing all small businesses a happy and productive 2014!

Photo Credit to Dan Moyle on Flickr

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