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Small businesses are the backbone of the American economy, accounting for nearly two-thirds of all recent private sector jobs. However, these businesses are often the first to feel the effects of a slowing economy. These uncertain times bring many challenges but, as a business owner, there are several things you can do to protect your business in a down economy.

Here are some things to keep in mind:

Cash Is King

One of the most important things to do in a down economy is to match its pace. You may need to slow down your own operations and expenditures. By avoiding the mistake of continuing to spend at the same rate you were in an up economy, you can maintain a positive cash flow and avoid taking on excessive debt. Consider focusing on the most important investments for now. Be sure to also watch your outstanding receivables. If your customers slow down on their payments, you may need to follow up more often to make sure you’re paid and not left with an uncollectible receivable.

Evaluate Your Supply Chain

Another strategy for weathering a down economy is to re-evaluate your supply chain, something many businesses are already doing in the wake of the Covid-19 pandemic. You could look at both domestic and international suppliers. It’s important to ensure your costs are appropriate and that you’re getting the best possible value. Don’t put all your eggs in one basket, either. You may also want to look for additional sources of supplies to ensure you’re getting the best rate for your supplies, and this could save money in ways you can see more immediately.

Evaluate Staffing Flexibility

You must also prioritize your people in a down economy, even more critical in the current climate, as businesses struggle to bring on new staff. One strategy to consider is cross-training your employees. Cross-training is the practice of training employees in the roles and responsibilities of more than just one position.

If you are a restaurant owner, an example of this might be to make sure all your servers are trained to know how to host the front of the restaurant and that your hosts should know how to wait tables. This way, you’ll have employees who can do more than one job should there be a need due to staffing shortages, layoffs, sick employees, etc.

You might also consider “grading” your employees, protecting your “A” players while making tough decisions about your “B” and “C” players. It may be wise to look at your revenue-producing employees versus your support staff. Should you need to reduce staffing, you’ll want to maintain your ability to generate revenue.

Invest in New Technologies with Immediate Returns

Finally, a down economy can be a good opportunity to invest in new technologies—particularly those that offer immediate returns. Although you may want to avoid making long-term investments right away, you must not let your competition become more efficient while you stand still. Try to look out for technologies that can help streamline your operations and improve your efficiency and integrate them at a slower pace than you might when the purse strings are less tight.

Remember, even if it seems like things aren’t great, every little bit helps. Even if the smallest changes might seem insignificant, a handful of tiny changes is still a handful. Success in an uncontrollable economy essentially lies in how you invest not only your money, but your time and resources, as well.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business & transaction advisory, healthcare management advisory, outsourced accounting, and risk advisory. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution, nonprofit, private equity and utilities.  

Gilmore Jasion Mahler’s Wanderlust, a signature benefit event for Flag City Honor Flight (FCHF), returns this Fall! Wanderlust: A Stroll Through Paris is Friday, October 28, 2022, at the Marathon Center for the Performing Arts in downtown Findlay. Wanderlust tickets are on sale now!

The event will raise money for Flag City Honor Flight which, after halting flights for two years, resumed its flight schedule with an unprecedented three flights in 2022. All proceeds from Wanderlust: A Stroll Through Paris will go directly to FCHF. Part of the National Honor Flight Network, FCHF is funded solely by donations. The organization brings veterans to Washington, D.C. to visit the memorials built in their honor. Veterans don’t pay a penny to make the trip.

FCHF paused flights in 2020 and 2021 due to the pandemic. This year’s flights were June 7 and September 13, with a final flight scheduled for November 1.

“We are so thrilled to be able to take to the skies and bring these American heroes on this special journey once again. We’re very grateful to GJM for hosting Wanderlust. Thanks to this event, we’ve been able to bring hundreds more Veterans to Washington, D.C.,” says FCHF President Bob Weinberg. “Our November 1, 2022 flight, which will be an all-Vietnam Veteran flight, has a very generous corporate sponsor, Ohio Logistics, covering the cost of the trip. But GJM’s Wanderlust event is critical to our core mission to bring Veterans from all eras to Washington, DC. Wanderlust 2022 proceeds will help fund our 2023 flights.”

Since its founding over 26 years ago, GJM has had a strong commitment to community. The firm has supported countless philanthropic efforts through the years and many staff members serve on the boards of local nonprofits. In 2015, GJM aligned with Flag City Honor Flight and established the major fundraiser. The GJM events in 2016, 2017 and 2019 have together raised over $260,000 for Flag City Honor Flight.

“I cannot imagine anything more meaningful than helping these men and women get to our nation’s capital with Flag City Honor Flight. While we can’t ever repay them for the sacrifices they’ve made for our country, this is one way we can show them how grateful we are as a nation and help give them an experience they’ll never forget,” says GJM Managing Partner Kevin Gilmore.

A big part of Wanderlust’s success is corporate, individual, and in-kind sponsorships. Special thanks to all 2022 sponsors, including major Wanderlust sponsors Ohio Logistics and American Interiors. 

Event Details:

An inspiring and entertaining evening, as attendees are transported to the romantic streets, flower markets, gardens, and cafes of Paris, “The City of Lights”. Guests will enjoy an evening embracing all things French, sipping on champagne & other drinks, enjoying French-inspired cuisine, live performers, a live auction, raffle and more.

WTOL news anchor Dan Cummins, who himself is very active in supporting FCHF through his news coverage, will emcee the 2022 event with GJM’s Susan Ross Wells. Findlay auctioneer Trent Farthing has graciously agreed once again to donate his talents for the evening’s live auction.

Live auction packages will include something for the men and ladies in the room, as well as two signature trips: one for a private villa in St. Lucia, the other: a getaway for two to Paris.

Tickets to Wanderlust 2022: A Stroll Through Paris are $70 each. To buy your tickets now, or secure a sponsorship, visit the Wanderlust 2022 webpage. Questions about the event? Simply reach out to GJM’s Tracy Kennedy at tkennedy@gjmltd.com, Deanna Herr at dherr@gjmltd.com or Susan Ross Wells at srosswells@gjmltd.com.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business & transaction advisory, healthcare management advisory, outsourced accounting, and risk advisory. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution, nonprofit, private equity and utilities.

A lot is going on with SECURE 2.0, a pending piece of legislation built on the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. The goal of the bill is to substantially boost the retirement savings of Americans. SECURE 2.0 contains numerous provisions that, if enacted, would affect individuals, employers, and small business owners.

SECURE 2.0 has provisions that bring several important implications for small businesses and would impact their retirement benefits programs, once the pending legislation is passed. These include expanded worker eligibility, automatic plan enrollment, and others. Not to mention the increase in the number of employees your post-employment benefit plan covers.

Sounds like a lot of work, right?

You need not worry.

SECURE 2.0 is designed with small businesses in mind. It will create new tax credits that are specifically designed to help employers.

This blog, the second in our two-part series on SECURE 2.0, post will explore two important and relevant points:

Increased Retirement Plan Start-Up Credit

One of the most significant changes in the retirement law is expanded tax benefits. SECURE 2.0 will double the tax credit for companies starting a retirement plan. Currently, the three-year credit is available for 50% of the qualified startup costs. This is for businesses employing no more than 100 employees.

100% Qualified Start-Up Costs

Eligible small businesses with 100 or fewer workers can claim a credit for 50% of their qualified start-up costs. Effective for tax years starting after 2022, Secure 2.0 would increase it to 100% for employers with 50 or fewer employees.

New Tax Credit

Businesses would also receive a new tax credit. This is a percentage of the employer contribution on behalf of employees, with a per-employer cap of $1,000. This is, however, limited to businesses with 50 employees or less. It will gradually phase out for companies with employees between 51 and 100.

From Less Than 100 to Only 50 Employees

While SECURE 2.0 contains provisions aimed at helping small businesses, it would also bring them some changes that will have negative impacts. In particular, these would be small businesses with 51 to 100 employees.

Because of the stated provisions in the bill, small businesses employing more than 50 individuals cannot take advantage of the total tax credit. Rather, the percentage will gradually phase out as the number of employees increases, as mentioned above.

On the whole, the aim of SECURE 2.0 is to help employers in the U.S. to encourage workers to plan for their retirement. If you are a business owner, the provisions in the bill will definitely impact your business once it’s enacted. This is regardless of whether you’re considering starting a new retirement plan or if you’re already offering one.  

If you’re interested in learning more about whether your small business qualifies for the retirement plan startup Tax Credit, you can learn more here.

An Important Note for the Remainder of 2022

If a plan wants to adopt a new safe harbor 401(k) plan in 2022, the employer needs to adopt that new plan by October 1, 2022 (if the business has a calendar year-end). For a traditional 401 (k) plan, the deadline is based on the employer’s tax status, as shown in the list below:

• S-Corporation (or LLC taxed as S-Corp): March 15 with extension Sept 15, 2023
• Partnership (or LLC taxed as a partnership): March 15 with extension Sept 15, 2023
• C-Corporation (or LLC taxed as C-Corp): April 15 with extension Oct 15, 2023
• Sole Proprietorship (or LLC taxed as sole proprietorship): April 15 with extension Oct 15, 2023

Part one of this 2-part GJM blog series on SECURE 2.0 outlines the changes that may be coming for individuals and how we save for retirement.

GJM’s Molly Wolf contributed this article. Molly has over 15 years of experience specializing in employee benefit plans and is an affiliate member of the American Society of Pension Professionals & Actuaries (ASPPA). She consults with clients on benefit plan design, compliance testing, payroll integration and reconciliation. She also serves as a third-party plan administrator.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business & transaction advisory, healthcare management advisory, outsourced accounting, and risk advisory. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution, nonprofit, private equity and utilities.