By Rieva Lesonski
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 struggling for two years to survive a global pandemic. But inflation, recession fears, a still unreliable supply chain and a country with near full employment resulting in a tight labor market all loomed, dampening many of our goals.
As we enter 2023, the outlook looks a little brighter for small business owners. I spoke to several small business experts to get their advice, insights, and small business predictions in the new year.
Small Business Outlook for 2023
Impact of a recession on SMEs
“No one knows if a recession will come, but it’s certainly fair to say that small businesses are currently facing several economic hurdles. Fortunately, small businesses are resilient. Even if a recession develops, our 2022 Now for small businesses The report shows that 90% are confident that they will still be in business a year from now. We also often see many small businesses starting up during recessions.
“However, some sectors are likely to be more affected than others. The consumers we surveyed said that during a recession they would cut spending on ‘convenience’, ‘lifestyle’ and ‘entertainment’ companies first. I encourage strongly urge business leaders to start their recession planning now to be safe.”
—Dave Charest, Director of Small Business Success, Constant contact
What the SME environment will look like in 2023
“2023 will be a year where small business owners self-engage and focus on the elements of business ownership over which they have control. The pandemic, inflation, supply chain issues and labor shortages have made running a business incredibly challenging in recent years.
“Still, research and conversations with our clients show that most entrepreneurs are resolute and optimistic towards 2023. While entrepreneurs expect a recession to force them to raise prices and reduce spending, entrepreneurs are focusing their efforts on marketing and promotion.” their businesses, investing in new technology and increasing the workforce.”
—Sharon Miller, President Small Business/Head Specialty Banking and Lending, bank of America
“Of course inflation is the biggest [concern] I’ve heard from small business owners. They fear that higher prices will scare off customers. But consumers are very willing to support the businesses in their community as long as the value is clear and the business maintains a relationship with them.
“The bigger challenge I see going into 2023 is the workforce. According to our research, about 40% of small businesses are struggling to attract new employees, and another 21% are concerned about retaining the current workforce. expects small businesses to get creative in what incentives they offer employees to keep them engaged and invested in the business.”
—Dave Charest, Director of Small Business Success, Constant contact
Outlook for startups
“Whether a recession comes or not, startups will continue to thrive. More and more individuals will take control of their own destiny instead of being at the mercy of big corporations.”
—Nellie Akalp, CEO, CorpNet
General outlook for small businesses
“While a recession is uncertain, the warning signs are there and small businesses should prepare for whatever new economic challenges come their way. There are a few ways they can do this. One is to improve the way they communicate with customers. It has never been more important to build an email or SMS list, which are still cost-effective ways to deliver useful information to customers.
“They should also build on their strengths: their connection to their communities and the great experiences they can provide customers. Bigger brands may have bigger budgets and more exposure, but they can’t provide the same inventory, customer service or experience that a small business can do that. Despite what you read in the headlines, small businesses are tough and will make it through whatever 2023 has in store for them.”
—Dave Charest, Director of Small Business Success, Constant contact
“Small business owners have proven themselves to be resilient and agile enough to handle any challenge of the economy. A recent survey by Hello Alice found that 73% of owners predict their business will grow by 2023. [They] are determined to continue their fight against inflation – their biggest challenge predicted for 2023. Surveyed owners identified price increases and product offering adjustments as two effective strategies that helped them fight inflation in 2022.
“However, these tactics contribute to two of owners’ biggest fears for 2023: losing customers due to price increases and the inability to acquire customers. In response, small business owners must learn best practices and explore software solutions to improve their marketing efforts for the coming year. year.”
—Elizabeth Gore, Co-Founder/CEO, Hi alice
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Small Business Finance in 2023
“In 2023, small businesses will be even more focused on controlling costs to manage an increasingly challenging economic climate. Small businesses are already using it fintech offers will be amenable to scrutiny as to whether the offers they have are exactly what they need to run their business. We expect many will look to consolidate services, which will drive demand for cohesive financial platforms that help small businesses manage their money end-to-end.
“When financial services such as payments, corporate banking and lending are intelligently integrated and embedded to meet the money needs of a small business owner, it can deliver unparalleled cost and efficiency benefits. Faster access to money opens up more opportunities to invest in growth; real time insights aid more informed strategic planning; and seamless integration between money management tools removes complexity to enable streamlined operations. Arming small businesses with the technology that fuels these capabilities will be especially important in the new year are critical as small businesses navigate an uncertain macroeconomic environment.”
—Rob Daniel, director of product management, Intuit QuickBooks
Small businesses buy and sell in 2023
“Based on how we’ve seen the small business market respond to rising interest rates, I expect the theme of 2023 to be seller financing. The Federal Reserve remains committed to its mission to fight inflation and has indicated that several rate hikes may be in the offing this year.
“Time will tell if that’s really the case. However, I expect these terms to motivate more buyers to request at least a certain percentage of the seller’s financing, and sellers to match, to close deals.” In terms of transactions, with so many buyers in the market and baby boomers about to retire, I expect transactions to continue at the same accelerated pace as they have been over the past two years, with financing being the main hurdle entrepreneurs must overcome. vanquish.”
—Bob House, Chairman, CoStar Group (BizBuySell)
Trends and challenges that will impact female entrepreneurs
“Women entrepreneurial ownership has grown rapidly over the past decade and I expect that trend to continue into 2023. Equal access to capital will always be essential to accelerate growth – and there is still much work to be done, but access to education is equally crucial. The 2022 Entrepreneurs for women and minorities in the spotlight found that 75% of female entrepreneurs wish they had more knowledge about small business finances. I believe the number of educational resources available to women entrepreneurs will continue to grow in 2023 and beyond.”
—Sharon Miller, President Small Business/Head Specialty Banking and Lending, bank of America
“2023 will be crucial for women and access to capital. Nearly 70% of small business owners told us they plan to apply for funding this year to fight inflation. Yet we know that women face barriers that limit their access to loans, credit and other vital working capital. We need to focus on ways to ensure every woman has the financial resources to respond to unexpected challenges and grow their business.”
—Elizabeth Gore, Co-Founder/CEO, Hi alice
Cybersecurity trends for small businesses
“Small business attacks will increase in 2023. SMBs already account for more than 41% of data breaches, but as large enterprises spend more on cybersecurity and use more robust frameworks, attackers will increasingly turn their attention to small businesses. Cybersecurity will also be a key differentiator in sales and partnerships for SMBs. Organizations are increasingly looking to partner with vendors who have mature security and compliance programs.”
Why businesses should implement a Bring Your Own Device (BYOD) policy
“Even if you prohibit your employees from using their own devices, some employees will still choose to use them. The main benefit of setting up a BYOD policy is to ensure that every device that could potentially connect to your company is properly secured.
“The main place where BYOD policies fail is an ineffective onboarding phase. Sending employees a list of instructions can be challenging, but this can be remedied with a live onboarding plan for each device. Your BOYD At a minimum, policies should include mobile device management and remote monitoring, endpoint and network security, and monitoring of personal data breaches.”
—Amir Tarighat, CEO, Desk
About the author
Rieva Lesonsky is CEO of GrowBiz Media and SmallBusinessCurrents.com and has been dealing with small businesses and entrepreneurship for over 30 years. Get a better understanding of business trends by signing up for her free currents newsletter.
