The past three years have given us many ups and downs, from the pandemic, geopolitical instability, digital trends, and the current economic conditions. When you’re budgeting for 2023, what factors should be considered?
Based on what we’ve learned through the past few rollercoaster years and what we expect in the years to come, here are our recommendations to consider when creating your 2023 budget.
2 Budget Lessons We’ve Learned In Recent Years
The Economy is More Uncertain than Ever
In the past few years, everything’s been full of uncertainty and unprecedented challenges. With approximately 18.1 million job losses in the US in 2020, the pandemic’s impact on people’s lives and the economy is evident. Even as we seem to be seeing the light at the end of the pandemic tunnel, businesses are still facing many issues, like supply chain issues, recovering the funds lost during peak pandemic times, and changing demands regarding recruitment and hiring. From post-pandemic recovery to instability in terms of the general economy and geopolitical relations, businesses are facing more uncertainty than ever before.
Digital has Become More Important than Ever
One of the most significant lasting impacts the pandemic created on the workforce is increased reliance on digital technologies. In order to stay afloat, most businesses had to quickly switch to a digital, remote environment that many weren’t used to. Even after the pandemic, the demand for digital experiences remains high, whether it’s the desire to work from home or more people shopping online rather than in person. Users and businesses alike have become more comfortable and reliant on digital platforms.
What is the Challenge of Budgeting for 2023?
Forecasting 2023, we’re looking at a potential recession, meaning possible hiring freezes and layoffs. On top of that, there’s persistent inflation and a lot of geopolitical and economic uncertainty in the year ahead of us. The 2023 crystal ball looks too cloudy to be confident in your 2023 budget planning.
You can’t expect to copy and paste last year’s budget and have it work perfectly for next year. Maybe years ago, you could’ve planned with a little more confidence in the coming year, but given the unprecedented situations we’ve all been living through in recent years, you can’t see what 2023 will look like. So, how should you size up 2023? What should your budget look like or not look like?
Here are 4 Recommendations to Help you Build your 2023 Digital Budget
1. Increase Your Digital Investment (Digital is Here to Stay!)
One thing is certain; digital tech is sticking around for the long haul. People have higher expectations for their digital experiences, and their knowledge and expectations will only continue to grow. In the past, having a simple website was enough because the average user didn’t know any better. But now, with users’ higher expectations, you should be focusing on digital strategy, upgrading and elevating to meet the newest and best digital trends so that you don’t lose your customer base. Even in uncertainty and a possible recession, increasing your digital investment is highly recommended, but still, be cautious. Cutting off the marketing budget during a recession is a common mistake. Cutting your marketing budget means new customers won’t be able to find your brand, which means a decrease in overall business and revenue. Plus, your competitors could easily overshadow you; if they don’t cut their marketing budget, all the customer attention is going to them. Plus, when it’s time to bounce back after a recession, customers may not trust you, as cutting off marketing shows a lack of stability.
2. Do Not Spend on Large, Risky Projects
The most logical decision you can make under uncertain conditions is to take steps to minimize the risk. As we enter 2023, it isn’t all about growing your business as fast as possible with big projects. Investing in larger projects will leave you spending larger amounts of money with more risk. Instead, consider investing in smaller projects with less risk. When you invest in several smaller projects, you spread the risk over those projects instead of having one very risky, costly project. For example, if you have new products or services, instead of making a new website for each product or service, you can add them to the existing website and invest more in improving your existing website.
3. Focus More on Consolidation, Maintenance, and Optimization
The focus of your business in 2023 should be centralizing, optimizing, maintaining, and consolidating. Consolidate and optimize your budget. For example, instead of maintaining seven different platforms, focusing on two or three will help you better control, manage, and optimize them. Plus, it’ll save you money. Seemingly small improvements to your online user experience can make a big difference for your objectives. This is the key to success in budgeting for 2023. Don’t be afraid to go for the “low-hanging fruit” that doesn’t seem valuable at first glance. Often, just because improvements are incremental doesn’t mean they don’t have value. You could miss a lot of value by skipping out on these opportunities!
4. Be AGILE and Keep Monitoring the Results
An essential part of any budget is tracking the results and adjusting your budget as needed. Your budget isn’t set in stone once you finish the planning. As you begin 2023 with your new budget, keep a careful eye on how your budget is being spent; is it going according to plan? Are you overspending on anything? If you are, be agile and adjust and refocus your budget. It’s also important to look at the results of what you’re paying for. Are you getting the expected results, or is it not working how you hoped? If any of your plans aren’t working out, stop it now. Don’t be afraid to change and adjust your budget and spending throughout the year.
Symetris Experts Can Help You Plan Your 2023 Digital Budget
In today’s context and the cloudiness of the future, we recommend going into 2023 being cautiously optimistic regarding digital investments by focusing on those incremental improvements that have the potential for high value and ROI. Digital strategy and budgeting for 2023 will differ for each business based on goals, category, and industry. Symetris experts have been in the industry for nearly two decades; yeah, that’s a long time! Our evolution team not only plans out the coming year to end and helps you prioritize the suitable digital investments but also helps you deliver the high value of those results without managing significant change. Give us a call, and let’s chat and create your customized budget plan for 2023.