Home Small Business Guiding Small Business Success – New Jersey Business Magazine

Guiding Small Business Success – New Jersey Business Magazine

In the latter part of 2020, when communities were in crisis due to the economic consequences of COVID-19, government incentive programs such as PPP loans, Employee Retention Tax Credits, increased unemployment benefits, and the lowering of interest rates helped many small businesses avoid shutdowns and other drastic outcomes.

“Costs were rising, but people – and small businesses – didn’t feel the full extent of it because there was an influx of money from relief funds and incentives,” says Steven Poliseo, partner at the accounting firm of Citrin Cooperman in Livingston. Toward the end of COVID-19 and into the present, however, those incentives have either been reduced or expired, forcing small businesses to deal with the harsh realities of rising costs and runaway inflation. In fact, 2022 saw the highest level of inflation in 40 years, and though there has been a contraction from last year’s peak, indicators are pointing toward a near-term expansion period experts say could extend into 2025.

“Inflation remains the top concern for a majority of small business owners, followed by rising interest rates, revenue, and supply chain issues,” says Robert Johnson, director & chief diversity officer, corporate group, at Gibbons Law, which has New Jersey offices in Newark, Trenton, and Red Bank. “Rising interest rates are limiting small businesses’ ability to raise capital or financing for their business. Minority-owned businesses are particularly vulnerable to rising interest rates and access to capital concerns.”

According to Matthew Flannery, senior vice president, SBA director at Jersey City-based Provident Bank, many of the small businesses that come to the bank for financing are faced with a lack of available working capital to run day-to-day operations. “A softening economy and bank failures earlier this year have led banks to be more cautious with their lending practices,” he says. “Access to bank-funded working capital is harder to obtain than in the past, and a high interest rate environment makes borrowing these funds more expensive than in years past.”

Law and Accounting Firms Offer Help

No doubt, COVID-19 ushered in a difficult period for small businesses, prompting many law and accounting firms to offer relief and guidance. Gibbons Law, for example, has partnered with the nonprofit Institute for Entrepreneurial Leadership (IFEL) on an initiative called “Small Businesses Need Us” (SBNU), which provides free legal counsel and other business services to minority- and women-owned businesses impacted by the pandemic. In the three years since the onset of COVID-19, Gibbons lawyers have donated hundreds of hours to SBNU clients through ventures like a STEM enrichment program for students, an event management company, and life and business empowerment coaching.

The Tax Team at Gibbons is also helping small business clients with tax issues that arise in corporate transactions like mergers and acquisitions, divestitures, restructurings and spinoffs.

“By staying well informed of supply chain trends and market developments, we can combine comprehensive knowledge of our clients’ ventures with always-current insight into the supply chain business environment to provide practical, perceptive advice, which is particularly relevant because of the inflationary challenges businesses are currently facing,” Johnson adds.

Another ongoing problem for small businesses is access to labor due to the consequences of COVID-19 and “the Great Resignation,” Citrin Cooperman’s Poliseo says. Food services, manufacturing and distribution, professional services, and the auto industry are some of the professions that have found qualified human resources difficult to locate.

He points to the rising costs of goods and materials as another major issue, saying costs adjusted for inflationary trends and a lack of certain materials, while improved, are of high concern for small businesses in the New York tri-state area and across the country. Material sourcing also remains challenging and small businesses have had to work hard to adjust supply chains to meet customer demand.

To help, Citrin Cooperman is using a proactive advisory model with the motto, “Focus on What Counts,” studying various industries and trends and advising clients on where their focus should be as well as strategies that can help their specific businesses. “Whether that is our manufacturing and distribution team helping owners solve supply chain issues, our staffing team advising on trends in human resource management, or our automotive dealerships team addressing inventory management and service department staffing needs, we go to our clients with advice and solutions specific to their business,” Poliseo says.

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