Small business owners will face relentless change in 2023 — in the economy, their industries and how they manage their firms. Below are some issues that may land on your desk this year. Are you ready to address them head-on?
Small business owners will continue to see input prices increase after one of the worst inflationary years in history. Additionally, Federal Reserve interest rate hikes have slowed the economy, but inflation must fall more before the Fed stops further increases.
As a result, business owners should continue to manage costs with discipline and creativity. For example, think twice about adopting new technologies if existing ones still perform well. However, consider investing in tools that automate tasks, increase productivity or decrease costs. Also, continue evaluating your prices to determine whether to maintain them or begin lowering them to normal levels.
Consider reassessing your sales projections and staffing needs if interest rate hikes begin restraining gross domestic product (GDP) growth. No business owner likes to lay off people; however, if the economic downturn becomes severe, you may have no choice but to reduce fixed costs. Since people represent the largest share of this number, steel yourself for hard decisions ahead.
“Quiet quitting” and mass resignations were the hallmarks of 2022. In the wake of the pandemic, employees began evaluating their careers. They often didn’t like what they saw, which spurred them to take time off or jump to competitors. Since the economy was strong last year, people had many jobs from which to choose. A slowing economy and tech-industry layoffs have changed this dynamic.
Regardless of the economy, improving your employees’ working conditions and incentives is still crucial. If they prefer working from home, make reasonable accommodations involving in-person, virtual and hybrid work styles. Most employees are willing to compromise if they believe company leaders have heard — and addressed — their concerns.
Hackers and cybercriminals are 300% more likely to target small-business employees than those who work for large corporations, which explains why 50% of owners expect a cyber incident to afflict their firm in 2023. In response, small business owners are adopting “zero-trust” cybersecurity. With this approach, firms no longer assume threats will originate outside their network. A zero-trust defense calls for greater vigilance, especially to threats that move laterally through a company’s internal network.
Ransomware will continue to plague business owners in 2023. Attacks increased by 80% year over year in 2022, with the majority (70%) targeting small businesses. To keep your business safe, visit the U.S. government’s Stop Ransomware website. It provides information and tools to prevent cybercriminals from taking your computers hostage.
In 2023, your company will face growing pressure to accept payments in multiple ways based on customer preferences. Digital wallets will become more ubiquitous as physical coin shortages persist and the metaverse makes credit card payments obsolete. Other options such as buy now, pay later (BNPL), PayPal and pay-by-bank across channels will also pick up steam. Small businesses that figure out the payment puzzle will gain a leg up over their competitors.
Small business marketing will become even more diverse and digitized in 2023. Think strategically about which tools will have the best return on investment (ROI). Online advertising will continue to be an attractive option, expected to grow from 55% of global advertising to 57%. However, competition over the best search terms can quickly become cost prohibitive. A better approach is to devise a content-marketing strategy to attract visitors to your site organically.
In 2023, bricks-and-mortar stores will adopt innovative methods of engaging — and entertaining — their customers. Hologram displays, for example, will become an increasingly powerful customer magnet this year.
Finally, small business owners have a new marketing technology to consider: generative artificial intelligence (AI). Embodied in tools such as ChatGPT, this innovative technology allows software to create words, music and images from a brief text prompt. Because they draw from the entire internet, they can easily create marketing or educational tools, design and code products and even handle customer-service requests.
With tech firms such as Microsoft and Google investing heavily in AI, it’s only a matter of time before generative applications transform how small businesses operate. Deciding whether to replace human workers with AI is one of the hard questions you’ll ponder in 2023 and beyond.
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