It could be another tough year for small business owners.
- Small businesses need to prepare for a possible recession next year.
- Technology is always evolving, and it pays to consider how it can help your business.
- Communicate with your customers and employees about any changes you need to make.
The year 2022 is coming to an end and so is the new year. After the recent turmoil, many small business owners may be hoping for a period of calm in 2023. Unfortunately, with a potential recession looming and no end to sky-high prices in sight, that may be a futile hope.
Here are five trends to watch in 2023.
1. Technology will become more important
The trick with new technology is implementing solutions that make your life easier, rather than letting it take over. Don’t embrace new technologies just because they exist and look exciting. Find technologies that can help your company 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 create personalized relationships with your customers. But if the majority of your business is face-to-face, it’s not worth wasting time learning to use new software that won’t help your bottom line significantly.
Looking at the bigger picture, we have recently seen the development of virtual worlds, artificial intelligence, augmented reality and blockchain. As a small business owner, it’s useful to be aware of these trends and consider how they might affect your company. But you don’t have to accept all or any of them if they don’t fit your needs.
2. Employee relationships are changing
Phrases like “quietly quit” and “great resignation” have gained a lot of traction this year. They reflect mixed attitudes to work in the wake of the pandemic. The job market has been very strong, but that could change if we enter a recession. Many are reporting fatigue and burnout, and some employees are rethinking their approach to work.
Employees are the backbone of many small businesses, and losing them can be costly. If you’re trying to navigate between in-person, hybrid, and remote work, try to understand why your employees might be hesitant to return to the office. Involve them in the planning process and find ways to meet their needs. A recent Microsoft study found that 87% of employees believe they are productive at work, while only 12% of leaders believe their teams are performing well. Don’t let productivity paranoia drive your decisions.
3. Sustainability is more than just a buzzword
According to Deloitte, the number of clients adopting more sustainable lifestyles has increased dramatically over the past year. This is partly driven by economic concerns, but there are also environmental concerns. Sustainability has been talked about for years, but it may now have a real impact on consumer choice.
If you can find ways to reduce waste, use sustainable packaging or commit to ethical work practices, it can help you reach a wider customer base. This is especially true if you can support any claims you make. There has been so much greenwashing that people don’t have much faith in companies’ ecological claims.
4. Inflation and economic insecurity
Inflation continues to rise despite the Fed’s aggressive actions. This presents a major challenge for small businesses. Raising prices is not easy as you may lose loyal customers in the process. But again, taking on higher costs can put your business at risk. 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 think the Fed’s disinflationary measures will trigger a recession. It’s not certain, but it’s wise to be prepared. Sit back and look at your cash flow, and try to make sure you have money on hand to stay afloat during a downturn. If you haven’t already done so, find ways to streamline your activities and increase efficiency. These are tough times, and every dollar you save can help your business survive.
You might want to consider applying for a business credit card now, before the economy gets worse, especially if you qualify for one with a 0% APR introductory rate. Using a credit card to make ends meet is generally not a good idea, but it may get you through any short-term cash flow issues. Some business owners may find it easier to get a credit card than a business loan.
5. Video is where it’s at
Attitudes to social media can change as quickly as Elon Musk did to Twitter, and keeping up with the latest trends can feel overwhelming. Instagram remains popular, with more than 60% of Gen Z using TikTok once a month, according to Insider Intelligence. Consider which channels your customer base is most likely to use and prioritize activity on those channels.
No matter what form of social media you use, video content has become just as important, if not more important, than text. People spend more time on pages with videos. You can condense a lot of information into a short video, making it a great way to tell your 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 cameras.
the bottom line
2023 is likely to present further economic challenges for small businesses, which will need to be agile and adaptable if they are to survive. Communicate with your employees and customers as much as possible about what is going on and how you are handling the situation. This can help you maintain these important relationships, even during difficult times.
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