Regulation Roulette: Can You Spin Your Way to Small Business Success in 2024?

Regulation Roulette: Can You Spin Your Way to Small Business Success in 2024?

As we head into 2024, small businesses face many new challenges, especially amidst economic uncertainties and regulatory shifts. With these new regulations meaning higher costs and greater pressures for small business owners, these small businesses need to set a strategy to tackle these challenges moving forward. 

Let’s look at some of the key challenges and the impact new regulations will have on small businesses in the upcoming year:

High Interest Rates

One of the persistent challenges haunting businesses of all sizes in 2023 was high interest rates. While the Federal Reserve has held its interest rate so far, the dynamic economic landscape could mean that interest rates could continue to rise as we move into 2024.

Interest rates play a pivotal role in shaping the financial health of businesses, affecting mortgage rates and rates of both personal and business loans. Small enterprises, which are often working on tight profit margins, can be severely affected by the burden of high interest rates on loans. Furthermore, smaller businesses do not have the privilege of passing on these higher costs to consumers, as bigger companies do. 

While the economy has been doing well enough that these smaller businesses are still cash-flow positive, the rising cost of capital does impact the ability of small businesses to invest in expansion, hire more skilled talent, or even weather economic downturns. 

Tax Law Changes

Another significant challenge for small businesses in 2024 revolves around the changing tax landscape. In 2024, the IRS is adjusting tax brackets, meaning that businesses could be taxed at a lower rate to tackle the rapid pace of inflation. On the business side, a large number of tax cuts from the Tax Cuts and Jobs Act of 2017 are ending in 2025. With this coming to an end, business income may be taxed at higher rates come 2025. 

These changes in tax laws can create uncertainty, making it challenging for small businesses to plan effectively and remain compliant. The burden of understanding and adapting to these changes can be overwhelming for small business owners dealing with many other business responsibilities. The increase in tax regulations for small businesses can also lead to unexpected financial burdens, affecting budgeting and forecasting for small businesses. 

HR-Related Changes

The global shift towards remote work has been accelerated by the global pandemic and rapid technological improvements, and small businesses are not exempt from this transformation. While working from home offers flexibility and cost savings, it also presents a different set of challenges for small enterprises. 

While remote working offers greater flexibility and many benefits for employees, it can be difficult for employers to manage remote teams, maintain productivity, and ensure effective communication. The shift towards remote working requires small businesses to invest in technology, cybersecurity, and employee well-being initiatives. Balancing the need for a remote-friendly workplace with the practicalities of day-to-day operations can be a delicate task for smaller companies that may not have the finances to invest in these needed technologies. 

Tech Upgrades and Costs

In our Digital Age, where technology is advancing at an unprecedented pace, small businesses face the dual challenge of staying technologically relevant and managing the associated costs. In order to embrace a full digital transformation, businesses need to invest in the latest software, cybersecurity measures, and digital marketing tools; all of which come with substantial financial implications.

For many small enterprises, the fear of falling behind in the race to digital transformation is made worse by the financial strain of making necessary upgrades. The costs associated with tech advancements can be a sizable financial burden on small businesses that may lack the financial resources. 

Crescent’s Unique Solution

Amidst these challenges, here at Crescent, we offer fractional CFO services, tax and accounting support, and technology consulting to help small businesses seeking to thrive. 

Fractional CFO Services: With Crescent’s fractional CFO services, small businesses can get access to high-level financial expertise without the hefty price tag of a full-time CFO. Our fractional CFOs help businesses get all the help they can get to optimize their financial operations and make well-informed financial decisions for the future.

Tax and Accounting Support: Amidst these new changing tax laws, our team of experts is staying abreast of the latest developments to provide small businesses with up-to-date guidance on compliance and tax optimization. This way, small businesses can focus on their core operations while ensuring financial compliance. 

Technology Consulting: Our technology consulting services are tailored to meet the unique needs of small businesses as they tackle rapidly changing digital needs. Our tech consulting services ensure small businesses can remain competitive in an increasingly digital business environment.

To learn how the team of experts at Crescent can help you master your “regulatory roulette” game and gain that competitive edge, reach out today! 


Disclaimer 

Category: Blog, CPA Services Insights, CPA Services News, Financial Planning, Tax Tags: , , No Comments

Want to personalize your product descriptions without sacrificing the trust that comes with a unified brand voice? Net

14 Essential KPIs for Effective Finance and Accounting Management

It’s no secret that having a clear understanding of financial performance is key for any business looking for suc

Benefits of Outsourcing Your Business Taxes This Tax Season

Tax season can be an especially daunting time for small businesses amidst the day-to-day operations and handling co

Comments are closed.