Budget season is here – What are you expecting for 2023?

Results from CFO Strategic Partners’ budget survey

Planning for 2023 is underway. With a potential recession looming and the cost of living increasing at a rate we’ve not experienced since the early 1980s, the uncertainty is making preparing and budgeting for the next year more complicated.

CFO Strategic Partners recently conducted a survey to hear business leaders’ thoughts going into 2023. The survey uncovered a lack of confidence in the economy, with a majority of participants believing we’ll be in a recession next year. Although people are feeling relatively positive about their organization’s future, there’s a sense of nervousness under the surface. The survey showed inflation is affecting most business operations. People shared it has led to increased prices, reduced services or products and, for 10 percent of respondents, staff was let go.

Despite the uncertainty in the air, the majority of organizations are still continuing to expand their team and anticipate increasing wages.

This survey was answered by people from a wide range of industries including construction, professional services, hospitality, manufacturing, HR and more. See below for a full breakdown of our results.

Survey participants believe we’ll be in a recession next year

A vast majority of the respondents believe we’ll be in a recession in 2023. Less than 8 percent of people said no, while 23 percent aren’t sure yet. This shows there could be some caution when planning for next year.  

There’s some uncertainty for business leaders on the future of their organization

Although most participants are feeling positive about their organization’s future, there’s still a significant amount of caution and uncertainty. Over 30 percent of respondents feel very positive, while less than eight percent are very nervous and uncertain. The rest are in the middle between positive and somewhat nervous.

Inflation is beginning to affect organizations

Inflation has been a major topic in the news and its effects are beginning to be felt by business owners. Only 15 percent of respondents said inflation isn’t greatly affecting their organization.

Inflation is leading to increased prices, limited services/products

Inflation has caused business leaders to make some changes to keep up. Our survey participants shared they’ve had to increase prices, limit services or products and, in some cases, cut staff. Leaders shared their costs of procurements have been increasing and margins are being reduced.

Organizations are continuing to grow teams, despite uncertainty on the horizon

Although this survey has uncovered a fair amount of uncertainty for the future, 53 percent of survey participants shared they’re planning to add to their team next year. About 30 percent aren’t sure yet and only 15 percent have no plans to expand their team.

A majority of survey respondents believe revenues will increase

More than half of the participants believe their revenues will increase over 2022. However, just over 30 percent believe revenues will be relatively flat and nearly eight percent are actually expecting a decrease.

Many believe gross margins will be similar to 2022

Most of the survey respondents are anticipating gross margins will be similar to 2022. Of the remaining respondents, half are expecting an increase between four and nine percent, while the other half are expecting a decrease anywhere from four percent to more than 10 percent.

Most participants are expecting a three to five percent wage increase

Most organizations are planning on a wage increase next year. Under eight percent of participants aren’t planning on an increase. A majority of people will be raising wages by three to five percent and some have shared they’ll be offering even higher increases.

Does your organization need help budgeting for 2023 or navigating the impending recession? CFO Strategic Partners’ team of experienced, on-demand outsourced CFOs can provide the financial strategy and guidance you need to get on track. To get started, please email Meghan Dalton at mdalton@cfosp.com or simply fill out the request for information form here.