From small firms increasingly using alternative funding sources to greater spending on digital marketing – a lot of 2023 business trends are coming online helping small businesses thrive in the first quarter and throughout the year.
Business News Daily reports that smaller businesses must adjust to a market that is always changing, which is true especially given the last few years during the COVID crisis.
Monitoring the trends that impact your company’s operations is essential if you want to meet client expectations and stay one step ahead of the competition, and there’s no better time to do so than now to set you up for small business success.
Earlier in January, JPMorgan Chase released its 2023 Business Leaders Outlook survey, which details insights from business leaders about their recession expectations, the impacts inflation has had on their approaches to pricing, sourcing and running operations, and their outlook for the year ahead.
JPMorgan Chase’s Business Leaders Outlook poll was conducted online from November 14 to December 13, 2022, with small firms with annual revenues between $100,000 and $20 million and midsize businesses with annual revenues between $20 million and $500 million. Nearly 1,800 business leaders from diverse industries across the United States took part in the study in total. Data from the present is contrasted with data gathered in the fourth quarter of prior years to determine trends year over year. The results of this online survey are statistically valid, and at a 95 percent confidence level, the error rate for small businesses is plus or minus 3.1 percent, and for midsize businesses it is plus or minus 3.5 percent.
The survey revealed that while most small and midsize business leaders anticipate a recession in 2023 and many continue to face inflation-related challenges, they largely remain undeterred when it comes to growth, hiring and expanding their businesses.
Black Business Owners Top-Line findings:
- 55 percent expect a recession in the year ahead, compared to 61 percent nationally.
- 79 percent are optimistic about their performance in the year ahead, compared to 72 percent nationally. Similarly, 75 percent are optimistic about their industry’s performance, compared to 63 percent nationally.
- 72 percent anticipate revenue and sales growth in the year ahead, and 69 percent expect their profits to increase in 2023.
- The top business challenges for Black business owners include inflation, supply chain disruptions and economic uncertainty.
- 55 percent anticipate hiring full-time employees over the next 12 months, compared to 51 percent nationally.
- To hire and retain employees, half (50 percent) of Black owners surveyed plan to increase wages, and 38 percent plan to offer upskilling and training opportunities, compared to 42 percent and 29 percent nationally.
“Inflation has been a challenging headwind impacting businesses of all sizes, across all industries,” said Ginger Chambless, head of research at JPMorgan Chase Commercial Banking. “While we have seen some encouraging signs that inflation has started to moderate and should cool over 2023, businesses may still want to consider adjustments to strategies, pricing or product mixes to help weather the storm in the near term.”
Baxter E. Hall, insurance broker and advisor at Kapnick Insurance, told the Michigan Chronicle recently that as a client executive and benefits consultant, he sees a lot of business trends and changes.
“The rising costs of medical and prescription costs are at the top of the list. Along with the need for mental health resources and how to get better employee engagement,” Hall said, adding that staying afloat could mean different things to different people but connectivity is always key. “I think expanding your network is always important. Exposure to different people in industries and positions that are different from yours adds a wonderful perspective. Also, adding new skills and certifications to your toolbelt is always a good thing.”
He described the insurance industry as a “noble profession.”
“The chance to help people prepare for the unexpected, whether it’s commercial, personal or medical insurance is a privilege,” Hall said. “There are so many positions that fit many interests and skill sets that people are not aware of. Part of the work I do with NAAIA (National African American Insurance Association) is to expose Black/BIPOC [people] to the opportunities in the insurance industry and assist with making it more diverse.”
Executives from small firms continue to have more optimistic economic outlooks than executives from medium-sized businesses, who indicated substantially more pessimistic views compared to this time last year, despite the widespread opinion that a recession will occur in 2023.
The forecast for the performance of small and medium firms is still positive, with 66 percent of small businesses and 72 percent of midsize enterprises expressing optimism for the coming year. More than two-thirds (69 percent) of small businesses anticipate rising sales and revenue in the upcoming year, while 65 percent predict higher earnings in 2023. Similarly, 51 percent of medium enterprises anticipate higher profits in 2023, while 63 percent anticipate higher revenue and sales.
“Following the challenges of the last few years, it’s encouraging to see the resilience of small business owners and leaders,” said Ben Walter, CEO of Chase Business Banking. “The next economic cycle is always right around the corner, so our role is to help small business owners plan ahead so they can succeed in good times and bad.”
Companies may want to concentrate on the following factors while planning for the remainder of 2023:
- Maintain Awareness of Economic Trends: Business leaders will want to pay close attention to whether current trends regarding the Federal Reserve, consumer spending, inflation, labor markets and more continue, slow down or reverse in the upcoming year even though they are undoubtedly familiar with today’s top economic headlines.
- Recession-Proof Your Company: No matter when or if a recession occurs, businesses may take action right now to maintain their flexibility, strengthen their balance sheet and even identify opportunities amid uncertainty.
- Maximize Working Capital: In times of economic instability, sustaining working capital is even more important. Working capital is a significant measure of a company’s financial health. Businesses may want to think about using supply chain financing and dynamic discount solutions, putting in place more effective inventory management and revising present loans to minimize liabilities to manage working capital more effectively.
More social media acumen is needed in 2023, too, as using different platforms will increase this year.
The importance of social media advertising is growing, but so has the level of competition. To develop an audience and raise brand awareness, small businesses should concentrate on a multichannel organic strategy. While advertisements can support organic growth, small businesses should refrain from engaging in a social media arms race with rivals when organic strategies like content marketing may provide a higher return on investment.
Marketers will use their top clients
Look for marketers to resort to their most loyal clients as a source of income during uncertain market conditions. Strengthen the focus on current clients who show indicators of brand loyalty to boost sales and support companies through tough economic times.
“A great and cost-effective way to identify and take advantage of your biggest brand advocates is through strategic UGC [user-generated content] efforts,” said Zarnaz Arlia, chief marketing officer for customer experience platform Emplifi. “Brands can maximize the value of UGC by promoting it through exciting offers, branded hashtags, contests and even via their e-commerce website.”
User-generated content can produce spectacular outcomes while frequently costing less than more established forms of promotion. “Authenticity is what modern consumers are craving,” Arlia said, “and there’s nothing more authentic than the voice of the customer.”
For more information on the Business Leaders Outlook survey, visit jpmorgan.com and search “2023 Business Leaders Outlook: U.S.”