October is National Financial Planning Month, but small business owners have an even better reason to take a close look at their finances now: 2027 will be here before you know it.
This is a good time to look beyond your revenue numbers and assess the financial health of your small business. Are your margins holding up? What are you paying for credit — and do you have access to financing if you suddenly need it?
Rohit Arora, CEO and co-founder of Biz2Credit and Biz2X, says those are among the questions small business owners should be asking now. He also believes AI is making some financial-planning capabilities that were once too expensive for many small businesses far more accessible.
Here are Arora’s thoughts on what small business owners should be watching — and doing — as they prepare for 2027.
Why the Fed’s Rate Environment Hits Small Businesses Differently
All small business lending in this country is indexed to Fed rates, and it’s a floating rate environment for most of the products. So, especially on the bank lending side, any time the Fed increases the interest rate, the interest cost even on the existing facilities (including SBA loans) goes up.
For a lot of small business owners, they need to plan accordingly for what that means for them and their financial costs going up. Unlike large businesses, small businesses don’t have access to long-term cheap debt capital, and their overall cash reserves are much lower.
On the other hand, small businesses are much more nimble and adaptable. In this current macro environment, the need for financial planning becomes even more imperative, especially leading into 2027.
The Metrics SMB Owners Should Be Watching Beyond Revenue
In this environment, SMBs have to watch their bottom line. They should ask themselves:
- How is your bottom line performing? Have the margins stayed stable?
- How much cash do you have in the reserve to sustain your business?
- Do you have any kind of credit facilities in place? If yes, then what’s the cost of that? If no, then how can you get access to some?
SMBs should also consider how their industry is performing. If you’re in transportation or logistics, higher diesel prices will impact those businesses.
How AI Is Changing SMB Financial Planning
AI is a game changer, as it can handle many things that once had to depend on accountants or financial controllers: looking at the financials of the business, benchmarking the business, and helping businesses plan their cash flow better. Even doing simple things like balancing accounts receivable and accounts payable, reviewing contracts and legal paperwork, or finding better suppliers who can give more cost-effective solutions.
AI, in that sense, can take a lot of that grunt work and also the day-to-day monitoring of the financials, which traditionally was very expensive for small businesses.
Financial Moves SMBs Should Make Now, Not in January
If small businesses are looking for access to credit, they should lock it in right now. If interest rates remain at this level or get more elevated, that credit is going to get more expensive.
In addition, small businesses have to plan their budget for 2027, and where they see their top and bottom line. Right now, it’s very important to protect one’s bottom line, because it’s easy to grow in a high-inflation environment, but more difficult to protect. And they should consider how to keep growing their businesses. The question is how to grow in a smart way, by spending money wisely and building a sustainable business rather than going bust.
Rieva Lesonsky is the founder of Small Business Currents, a content company focusing on small businesses and entrepreneurship. You can find her on Twitter @Rieva, Bluesky @Rieva.bsky.social, and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
Photo courtesy Getty Images for Unsplash+
