How to manage business success in 2023 …

For beauty and wellness brands, the year ahead continues to promise an uncertain economy mixed with a highly competitive marketplace. Now more than ever, beauty CEOs need to take steps that are both tactical (finding efficiencies) and strategic (looking toward new and future trends).

So how can you manage your business in a period of economic uncertainty and inflation?

While there is no set playbook to follow, resourceful beauty and wellness CEOs will look for opportunities to outsmart competitors who continue their business as usual. The challenge is to be aggressive and innovative. Being innovative in rough times means taking steps to become more cost-effective, more operationally efficient, and better positioned to do well when the market improves.

Despite the gloomy economic outlook, ask yourself, what do you want to achieve in your business? By prioritizing what you want to focus on, you ensure you don’t spend money you don’t have, and, more importantly, you can align with growth opportunities.

Tactics: do what you do even better

Start by gathering up your financial statements, customer feedback, and team input. Look at your accomplishments over the past year. Did you achieve what you set out to? Or did you find yourself taking an unexpected path to a different kind of success? Take stock of what you anticipated and what changed along the way. Find ways to evaluate what you do well and what you could do better while noting realistic adjustments to make in 2023.

Here are four key tactics that will help you do what you do even better:

1. Identify activities worth repeating. When you recognize “nice to do” from “had to do”, you can take actions to cut non-essential expenses. Then, realign your spending with activities worth repeating — those that are more successful in supporting business growth.

2. Monitor working capital. With longer inventory holdings to offset volatility in the supply chain, monitoring your working capital and cash flow is important. Evaluate SKU productivity, negotiate with suppliers, and keep an eye on your cash flow over the next three to six months.

3.  Balance product pricing and volume. Beauty consumers are spending at unprecedented rates and appear to have adjusted to full pricing. However, the marketplace is still volatile, and prices can greatly impact sales if you’re not paying attention. Monitor the balance between pricing and volume — when you see a negative shift, it’s time to make a change.

4.  Finally, consider contingency plans. When something comes your way, whether it’s good or bad, you need to be financially prepared. Assess credit lines and other financing to leverage new opportunities and overcome bumps in the road. Continue to gauge your company’s overall financial health, documenting both your long-term and short-term market assumptions and their impact on working capital.

Strategy: find ways to rise above the noise

When so much is uncertain, successful CEOs don’t avoid the challenges brought by tough economic times. They prepare for opportunities through planning and innovation, and by continuing to align actions with brand values. While you’re sweating the small stuff, don’t forget to take a moment to find opportunity by looking for spaces where you can rise above the noise and gain market share.

Here are three key strategies to consider in your innovation plan:

1. Connect with customers. Whether you conduct market research or assess the effectiveness of your marketing plan, be strategic and find ways to improve how you spend your investment while driving a deeper connection to your customer base.

2.  Strengthen key relationships. From customers to bankers to employees — consider ways to strengthen the key resources you’ll need to support growth. Explore new opportunities with vendors and suppliers who may accommodate the needs of a small business with more flexibility.

3. Prepare stretch plans. While you might be acting with prudence, given the marketplace’s volatility, be prepared to move forward if all signs point toward opportunity. Evaluate what your go forward point would be — the place where the benefit outweighs the risks.

As you move through the year ahead, take time to celebrate your success, and if you identify any pitfalls or failures, really take the time to figure out what happened and what went wrong.

When you focus on tactics and strategy, the steps you still need to take become increasingly visible. The results of these practices will add up over time. While they do, you’ll feel more in control of your money and business decisions.

Do you need assistance with your budgeting or planning? Get in touch! We offer programs that fit your business’s needs and growth stage. For more information, reach out to us at info@thielstyle.com.