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By Rieva Lesonsky
The future looks bright for small businesses, but 2023 will also have challenges in store.
Many small business owners expected 2022 to be a year of recovery after two years of struggling to survive the global pandemic. But inflation, the recession, a still-unreliable supply chain, and a nation full of jobs, resulting in a tight labor market all loom large, crowding out many of our goals.
As we head into 2023, the outlook for small business owners looks a little brighter. I spoke with several small business experts to get their advice, insights and predictions for small businesses in the new year.
Small business outlook for 2023
The impact of the recession on SMBs
“No one knows if a recession will happen, but it’s fair to say that small businesses are dealing with a number of economic obstacles right now. Fortunately, small businesses are resilient. Despite the recession, our 2022 Small Business Now report shows that 90% are confident they will still be in business a year from now. We see many small businesses start up during recessions.
However, some sectors may be more affected than others. Consumers we polled said that during an economic downturn, they cut back on spending on “convenience,” “lifestyle” and “entertainment” businesses first. I strongly encourage those. Business leaders start their recession planning now to protect themselves.
–Dave Charest, Director of Small Business Success; Constant communication
What will the small business environment look like in 2023?
“2023 will be the year small business owners bet on themselves and focus on the controlled elements of business ownership. Between the pandemic, inflation, supply chain issues and labor shortages, running a business has been incredibly challenging over the past few years.
“Even now, through research and discussions with our customers, it’s clear that most business owners are determined and optimistic about 2023. As business owners anticipate an economic downturn that may force them to raise prices and cut costs, entrepreneurs are focusing their efforts on marketing and promoting their businesses. , investing in new technologies and increasing headcount.
– Sharon Miller, President of Small Business/Head of Specialty Banking and Lending Services; Bank of America
“Of course, the biggest thing is inflation. [concern] I’ve heard from small business owners. They fear that price hikes will drive away customers. But consumers are more willing to support businesses in their community as long as the value is clear and the company doesn’t engage with them.
“The biggest challenge I see extending to 2023 is workforce development. According to our research, 40% of small businesses are struggling to attract new employees, and another 21% are concerned about retaining existing employees. Incentives to invest.”
–Dave Charest, Director of Small Business Success; Constant communication
Outlook for beginners
“Recession or not, startups will continue to grow. Instead of being at the mercy of big corporations, more and more individuals are taking control of their own destinies,” he said.
–Nellie Canop, CEO; Corpnet
Overview for small businesses
Although a recession is not certain, there are warning signs, and small businesses need to start preparing for the new economic challenges to come. There are a few ways to do this. One is to improve the way you interact with customers. Not at all, it was still more critical to build an email or text list, which are cost-effective ways to deliver valuable information to customers.
“They also need to lean on their strengths — their connections to their communities and the great experiences they can offer customers. Big brands may have bigger budgets and more exposure, but they can’t offer the same goods, customer service or experience. Small businesses can. Despite what you might read in the headlines.” , small businesses are tough and will overcome anything 2023 throws at them.
-Dave Charest, Director of Small Business Success; Constant communication
“Small business owners have proven to be resilient and resilient to any challenges the economy throws at them. A recent Hello Alice survey found that 73% of owners predict their businesses will grow by 2023.” [They] They are committed to continuing their fight against inflation – their biggest challenge for 2023. Surveyed owners identified price increases and adjustments in product offerings as two effective strategies to help them fight inflation in 2022.
“However, these methods contribute to both owners’ biggest fears in 2023: losing customers due to price increases and not being able to get customers. In turn, small business owners need to learn best practices and explore software solutions to optimize their marketing efforts in the coming year.”
– Elizabeth Gore, Founder/CEO; Hello Alice
Additional articles from AllBusiness.com:
Small business financing in 2023
“In 2023, small businesses will be more focused on managing costs to manage an increasingly challenging economic environment. Those with small businesses who already use fintech offerings will be vulnerable to testing whether they actually have what they need to run their business. We expect many to look to consolidation services, increasing demand for integrated financial platforms that help small businesses manage their finances end-to-end.
“Financial services such as payments, commercial banking and lending can unlock unparalleled cost and efficiency benefits when intelligently combined and integrated to meet the financial needs of a small business owner. Access to cash quickly offers more opportunities to invest in growth-driven insights with a more informed strategy.” They help plan; and seamless integration across financial management tools removes complexity to enable streamlined business operations. Arming small businesses with technology that fuels these capabilities will be especially important in the new year as small businesses navigate the unknown macroeconomic environment.”
– Rob Daniels, Director of Product Management Intuit QuickBooks
Buying and selling small businesses in 2023
“Based on how we’ve seen the small business market with interest rates rising, I expect the theme for 2023 will be seller financing. The Federal Reserve remains steadfast in its mission to fight inflation and has indicated that several rate hikes are likely this year.
“Time will tell if that’s true. But I expect these conditions will encourage more buyers to ask and sellers to handle at least a certain percentage of seller financing to close deals. In terms of transactions, so more buyers in the market and baby boomers on the brink of retirement, transactions that we’ve seen in the last couple of years. I expect them to continue at an accelerated pace, with finance being the main hurdle for entrepreneurs to overcome.
– Bob House, President, Costar Group (BizBuySell)
Trends and challenges affecting women entrepreneurs
“Women’s business ownership has grown rapidly over the past decade, and I expect this trend to continue in 2023. Equal access to capital will always be important to accelerating growth – and there is still more work to be done, but access to education is equally critical. . The 2022 Women and Minority Business Owner Spotlight found that 75% of female business owners want to be more knowledgeable about small business finance. I believe the number of educational resources available to women entrepreneurs will continue to grow in 2023 and beyond.
– Sharon Miller, President of Small Business/Head of Specialty Banking and Lending Services; Bank of America
“2023 will be critical for women and access to capital. Nearly 70% of small business owners told us they plan to apply for inflation-fighting funding this year. However, we know that women face barriers that limit their access to credit, loans and other essential business capital. We need to focus on ways to ensure that every woman has the financial tools to meet unexpected challenges and grow their business.
– Elizabeth Gore, Founder/CEO; Hello Alice
Small business trends in cyber security
“Attacks on small businesses will increase by 2023. SMBs already account for more than 41% of data breaches, but as larger enterprises spend more on cybersecurity and adopt more robust frameworks, attackers will shift their focus to smaller businesses. Cybersecurity will become a major driver of sales and partnerships for SMBs.” Organizations want to work with vendors that have mature security and compliance programs.
Why businesses should implement a BYOD (Bring Your Own Device) policy
“Even if you prohibit your employees from using their own devices, some employees will choose to use them anyway. The main benefit of establishing a BYOD policy is to ensure that any device that may be connected to your company is properly managed.
“The top area where BOYOD policies fail is ineffective on-boarding. Sending a list of instructions to employees can be challenging to follow, but can be fixed by using a live on-boarding plan for each device. At a minimum, your BOYD policy should include mobile device management. And remote monitoring, endpoint and network management.” Network security and personal data breach monitoring.
– Amir Tarigat, CEO, Agency
About the author
Rieva Lesonsky CEO of GrowBiz Media and SmallBusinessCurrents.com And has been covering small business and entrepreneurship for over 30 years. Get more insights about business trends by subscribing to her free Currents Newspaper.
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