With things like COVID, higher prices, and supply chain issues continuing to impact the world, small businesses have faced their fair share of challenges this year.
What about next year? Here are some predictions for 2023, along with ways your business can prepare.
1. Inflation fears continue to affect small businesses.
The 2022 inflation data has been worrisome for most businesses. Small business owners have experienced price hikes when purchasing the raw goods necessary to serve customers. Some passed the increases on to customers by raising prices, while others survived on smaller profit margins.
In 2023, whether inflation continues or not, small business owners will not soon forget the struggle of managing rising costs.
Whether you make chocolates or widgets, to remain a viable option in the marketplace, businesses must find balance between raising prices and constantly managing margins.
Restaurant owners will continue to analyze their menus and work with vendors to find better prices without sacrificing quality. Manufacturers will continue to explore avenues to source less-expensive raw materials.
Working alongside your accountant to monitor financial performance is crucial. So is talking with your ASBTDC business consultant about financial analysis and budgeting for 2023.
2. Owners look to incentivize employees in innovative ways.
Businesses of all sizes are struggling to attract and retain human resources. Standing out to potential new employees is a challenging game to win.
In 2023, the labor pool will grow increasingly focused on work-life balance. Younger generations no longer prioritize high salaries and top-notch benefit packages above all else. Small business owners in many fields will be forced to consider alternative incentives to remain competitive.
“Millennial and Gen Z job seekers are looking for a different type of opportunity than their Boomer and Gen X predecessors, with a strong emphasis on flexibility, culture, mission alignment, and career path mentorship,” says the article How Small Businesses Can Compete for Talent in a Tight Market.
Businesses that implement technology infrastructure to allow for alternative work schedules and locations will win the battle for employees.
Small businesses have the benefit of being much more nimble than corporate America. What changes can you make to win the talent war that will continue in 2023?
If managing human resources is not a strong suite, consider hiring a human resource professional or partnering with an HR consultant to brainstorm ways to attract and retain your workforce.
3. Collaborations make everyone stronger.
Over the past few years, banding together has served small businesses well. In 2023, business owners will continue to put their competitive instincts aside to network and utilize the strengths of other small businesses – yes, even competitors.
Breweries will come together to do collaborative beer production. Bakeries and restaurants will look to add freshness and flavor by partnering with local farmers to offer farm-to-table options. Stores will sell local artists’ work as unique home décor.
When small businesses collaborate, their customers and communities win.
If going it alone feels too daunting, explore collaborations and partnerships.
Check out 6 Ways Collaboration Can Help You Grow Your Business for ideas.
4. Community banks are more important than ever.
Any small business has several advisors: your CPA, your attorney, your insurance agent, your local ASBTDC. Over the past few years, you’ve likely gotten to know your community banking partners better, too.
You may have applied for and received Paycheck Protection Program dollars after visiting with your community bank’s lending team. The financial service representatives may have helped you better leverage your merchant service features. But in 2023, your community bank may become one of your greatest advocates.
It is becoming increasingly difficult for banks to differentiate themselves, since they all offer similar rates and terms. Community bank teams are therefore counting on their local ties.
They patronize their customers’ businesses. They understand the local market and can offer insights into the economy, and they can point you in the right direction when the path seems less than clear.
The Arkansas Community Bankers website provides an online directory of community banks in the state.
