It could be another difficult year for small business owners.
- Small businesses need to prepare for a potential economic downturn next year.
- Technology is constantly evolving, and it’s worth considering how it can help your business.
- Communicate with your customers and employees about changes you need to make.
The end of 2022 is fast approaching and with it the beginning of a new year. After all the recent upheaval, many small business owners may be hoping for calmer times in 2023. Unfortunately, with a looming recession and no end to sky-high prices, that could be a vain hope.
Here are five trends to watch out for in 2023.
1. Technology becomes even more important
The trick with new technologies is to implement solutions that make your life easier without letting them take over. Don’t embrace new technology ideas just because they exist and look exciting. Look for technologies that will help your business achieve its goals.
For example, if you sell a lot of products online, the right ecommerce software can save you a lot of time. Good email marketing software can help you build personalized relationships with customers. But when the bulk of your business is in-person, it’s not worth wasting time learning how to use new software that doesn’t significantly benefit your bottom line.
If we look at the big picture, lately we’ve seen the growth of virtual worlds, artificial intelligence, augmented reality, and blockchain. As a small business owner, it’s helpful to understand these trends and how they might impact your business. But you don’t have to accept all – or some – if they don’t suit your needs.
2. Employee relationships are changing
Terms such as “quiet cessation” and “great resignation” were very popular this year. They reflect a complex mix of attitudes towards work after the pandemic. The job market has been extremely strong, but that could change if we hit a recession. Many people complain of fatigue and burnout, and some employees are rethinking their attitude towards work.
Employees are the backbone of many small businesses, and losing employees can be costly. As you try to navigate the waters of in-person versus hybrid versus remote work, try to understand why your employees may be reluctant to return to the office. Include them in the planning process and look for ways to meet their needs. A recent Microsoft study found that 87% of employees felt they were productive at work, while only 12% of leaders believed their teams were performing well. Don’t let productivity paranoia dictate your decision-making.
3. Sustainability is more than just a buzzword
According to Deloitte, the number of clients who have adopted a more sustainable lifestyle has increased significantly over the past year. This is partly due to economic concerns, but also to environmental concerns. People have been talking about sustainability for years, but now it can really change consumer choices.
If you’re looking for ways to reduce waste, use sustainable packaging, or commit to ethical labor practices, this could help you reach a broader customer base. This is especially true if you can back up your claims. There is already so much greenwashing that people have little faith in companies’ eco-claims.
4. Inflation and Economic Uncertainty
Despite aggressive action by the Federal Reserve, inflation continues to rise. This presents small companies with major challenges. Raising prices is not easy as you risk losing loyal customers in the process. But swallowing the higher costs could also endanger your company. One way to manage this is to be as transparent as possible with your customers about any cost increases.
The flip side of the coin is that many economists now believe that the Fed’s anti-inflationary measures will trigger a recession. It is not a certainty, but it is advisable to be prepared. Sit down and look at your cash flow and try to make sure you have cash on hand to stay afloat in an economic downturn. If you haven’t already, look for ways to streamline your activities and increase efficiency. These are lean times and every dollar you can save could help your business survive.
You should consider applying for a business credit card now, before the economy worsens, especially if you can qualify for one with an introductory 0% APR. Using a credit card to keep yourself afloat isn’t usually a good idea, but it could help you weather short-term liquidity problems. Some business owners may find getting a credit card easier than getting a business loan.
5. Video is where it’s at
Attitudes toward social media can change as quickly as Elon Musk’s attitude toward Twitter, and keeping up with the latest trends can feel overwhelming. Instagram remains popular, and according to Insider Intelligence, over 60% of Gen Z use TikTok once a month. Think about which channels your customer base is most likely to use and prioritize activity on those channels.
Whatever form of social media you use, video content is becoming just as much if not more important than text. Users spend more time on sites with videos. You can pack a lot of information into a short video, making it a great way to tell a story and build your brand. If video isn’t part of your current content and marketing strategy, 2023 could be the year to turn on the cameras.
2023 may bring more economic challenges for small businesses, and businesses need to be agile and adaptable if they are to survive. Communicate as much as possible with your employees and your customers about what is happening and how you are handling the situation. This could help you maintain those important relationships even during potentially difficult times.
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