It could be another tough year for small business owners.
the main points
- Small businesses need to prepare for a potential economic downturn next year.
- Technology is always evolving, and it pays to think about how it can help your business.
- Communicate with your customers and employees about any changes you need to make.
The end of 2022 is fast approaching, and with it comes the beginning of a new year. After all the recent turmoil, many small business owners may be hoping for quieter times in 2023. Unfortunately, with a potential recession looming and no end in sight to exorbitant prices, this 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 to implement solutions that make your life easier, without letting it take over. Don’t embrace new technology ideas just because they exist and sound exciting. Find technology that will 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. A good email marketing program can help you build personal relationships with customers. But if most of your work is personal, it’s not worth wasting time learning to use new software that won’t significantly help your bottom line.
Looking at the bigger picture, we have recently seen a growth in virtual worlds, artificial intelligence, augmented reality, and blockchain. As a small business owner, it’s helpful to understand these trends and consider how they might affect your company. But you don’t have to embrace all — or any — of it if it doesn’t align with your needs.
2. Employee relations are changing
Terms like “quiet takeoff” and “grand quit” have gained a lot of traction this year. They reflect a complex mix of post-pandemic attitudes toward work. The job market has been very strong, although that could change if we go into a recession. Many people report burnout and burnout and some employees are rethinking their attitude to work.
Employees are the backbone of many small businesses, and losing employees can be costly. If you’re trying to navigate the in-person vs. hybrid vs. remote working environment, try to understand why your employees are reluctant to return to the office. Involve them in the planning process and find ways to meet their needs. A recent study from Microsoft found that 87% of workers felt they were being productive while working, while only 12% of leaders were confident their teams were doing well. Don’t allow productivity paranoia to drive your decision making.
3. Sustainability is more than just a buzzword
According to Deloitte, there has been a sharp increase in the number of customers adopting more sustainable lifestyles in the past year. This was driven in part by economic concerns, but also by environmental factors. People have been talking about sustainability for years, but it can make a real difference to consumer choices.
If you can look for ways to reduce waste, use sustainable packaging, or adhere to ethical business practices, it can help you attract a broader customer base. This is especially true if you can support any claims you make. There has already been so much greenwashing that people don’t trust companies’ environmental claims very much.
4. Inflation and economic insecurity
Despite aggressive actions by the Federal Reserve, inflation continues to rise. This poses major challenges for small businesses. It is not easy to raise prices because you risk losing loyal customers in the process. But equally, swallowing high 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 believe that the Fed’s anti-inflationary measures will lead to a recession. It’s not a sure thing, but it’s wise to be prepared. Sit down and look at your cash flow and try to make sure you have the money on hand to stay afloat in the event of an economic downturn. If you haven’t already, find ways to streamline your activities and increase efficiency. These are tough times and every dollar you can save can help your business survive.
You might consider applying for a business credit card now before the economic situation gets worse, especially if you can qualify for a card with a 0% introductory rate. Using a credit card to stay afloat isn’t usually a good idea, but it can help you work through any short-term cash flow problems. Some business owners may find it easier to obtain a credit card than to secure a business loan.
5. The video is in place
Social media attitudes can change as quickly as Elon Musk’s attitude toward Twitter, and keeping up with the latest trends can feel overwhelming. Instagram remains very popular and more than 60% of Gen Z use TikTok once a month, according to Insider Intelligence. Think about which channels your customer base is most likely to use, and prioritize activity on them.
Whatever form of social media you use, video content has become – if not more important – than text. People spend more time on pages with videos. You can summarize a lot of information in a short video, which makes 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 companies will need to be flexible and adaptable if they are to survive. Communicate as much as possible with your employees and customers about what is happening and how you are managing the situation. This may help you maintain those important relationships even through difficult times.
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