5 Small Business Trends to Watch in 2023
Posted Dec 29, 2022
The end of 2022 is fast approaching, and with it comes the start of a new year. After all the recent upheavals, many small business owners may be hoping for some calmer times in 2023. Unfortunately, with a potential recession looming and no end in sight for sky-high prices, this could be a vain hope.
Here are five trends to watch for in 2023.
1. Technology will become even more important
The trick with new technology is to implement solutions that will make your life easier, without letting it take over. Don't embrace new tech ideas just because they exist and look exciting. Look for technology that will help your company achieve its goals.
For example, if you sell a lot of products online, the right e-commerce software could save you a lot of time. Good email marketing software can help you build personalized relationships with clients. But if the majority of your business is in person, it isn't worth wasting time learning to use new software that won't significantly help your bottom line.
Looking at the bigger picture, we've recently seen the growth of virtual worlds, artificial intelligence, augmented reality, and blockchain. As a small business owner it's useful to understand these trends and consider how they might impact your company. But you don't have to embrace all -- or any -- of them if they don't align with your needs.
2. Employee relationships are changing
Terms like "quiet quitting" and the "Great Resignation" gained a lot of traction this year. They reflect a complex mix of post-pandemic attitudes toward work. The job market has been extremely strong, though that may change if we head into a recession. Many people are reporting fatigue and burnout and some employees are rethinking their attitude about work.
Employees are the backbone of many small businesses, and losing staff can be costly. If you're trying to navigate the waters of in-person versus hybrid versus remote work, try to understand why your staff may be reluctant to return to the office. Involve them in the planning process and look for ways to accommodate their needs. A recent study from Microsoft found that 87% of workers felt they were being productive while at work, while only 12% of leaders were confident their teams were performing well. Don't allow productivity paranoia to drive your decision making.
3. Sustainability is more than just a buzzword
According to Deloitte, there's been a sharp increase in the number of customers adopting more sustainable lifestyles in the past year. That's partly been driven by economic concerns, but also by environmental ones. People have been talking about sustainability for years, but it may now make a real difference to consumer choices.
If you can look for ways to reduce waste, use sustainable packaging, or commit to ethical work practices, it could help you appeal to a wider client base. This is particularly true if you can support any claims you make. There's already been so much greenwashing that people don't have a lot of confidence in companies' eco-claims.
4. Inflation and economic insecurity
In spite of aggressive action from the Federal Reserve, inflation continues to rise. This poses significant challenges for small businesses. It isn't easy to raise prices as you risk losing loyal customers in the process. But equally, swallowing the higher costs could put your business in jeopardy. One way to manage this is to be as transparent as possible with your clients about any cost increases.
The flip side of the coin is that many economists now believe that the Fed's anti-inflationary measures will trigger a recession. It isn't a certainty, but it's wise to be prepared. Sit down and look at your cash flow and try to ensure you have money on hand to stay afloat in an economic downturn. If you haven't already done so, look for ways to streamline your activities and increase efficiency. These are lean times and every dollar you can save could help your business survive.
You might consider applying for a business credit card now before the economic situation worsens, especially if you can qualify for one with a 0% APR introductory rate. Using a credit card to stay afloat is not usually a great idea, but it might help you weather any short-term cash flow problems. Some business owners may find it easier to get a credit card than secure a business loan.
5. Video is where it's at
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 continues to be popular and over 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 those.
Whatever form of social media you use, video content is becoming as -- 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 them a great way to tell a story and build your brand. If video isn't part of your current content and marketing strategy, 2023 might be the year to turn on the cameras.
Bottom line
2023 may bring further economic challenges for small businesses, and companies will need to be agile and adaptable if they are to survive. Communicate as much as possible with your staff and your customers about what is happening and how you're managing the situation. This could help you maintain those important relationships even through what could be difficult times.