A month into 2023 and we’re already seeing some new issues to pile onto those that have crossed over from 2022. Most small business owners are already up to their necks in planning how to mitigate next week’s issues, but what about preparing for the rest of the year?. Planning ahead as a small business owner is a luxury rarely afforded. Especially in this new era of unbelievably fast globalization and interconnectedness, keeping track of current events means being a world news expert. While business leaders across the globe have already posed their thoughts on the state of the new year’s economy and job market, it is perhaps even more valuable to hear from the people living the small business reality day in and day out. Consider, then, these collected hypotheses from real small business owners and thinkers about what they (and you) ought to be aware of pushing further into 2023.
In today’s market, one business’s slowdown is another’s ramp-up. Consider, then, the prediction and recommendations of Stacy Elmore, the Co-Founder of The Luxury Pergola, SEE Home Improvements, and LouveRoof Luxury Pergolas. Her business keenly knew that consumer spending had changed and was determined to beat the trend.
“For our business, we are seeing a rapid slowdown in the economy. We’ve had to shift our product from a “dealer focused” distribution model to a direct-to-consumer DIY product. The reason for this is that with home equity (for many) shrinking, consumer debt rising, and retirement accounts shrinking. We are noticing more people prioritizing necessities in their spending, and luxury products are the first to dip in performance.
“Locally, our installation of Louvered Pergolas is down, so by supplementing with a DIY kit, we’ve seen our sales improve. I expect revenues to drop for small businesses across the country until mid-2023. As interest rates rise, expensive products (that are financed) will continue to drop in gross revenue. Businesses have 2 options: Either raise Prices (but have lower volume) or pivot to grow revenue. Unfortunately, many businesses don’t have many, if any, places to pivot. It’s best to get creative.”
The Future of Advertising
As a business owner, you make the decisions that affect not only your livelihood but that of your employees. Small business co-owner and small business consultant Chris Glarner has abundant experience dealing with strategic cuts both in his own business and those he consults. Glarner poses that the rules of the game are likely changing for advertising, especially for companies with smaller budgets.
“The livelihood of business owners and their employees directly relies on the owners’ decisions, which makes each decision and outcome a personal one. For some, fear tends to rule, and the fear of poor economic conditions is causing hesitancy in moving forward with key projects and investments.
“More specifically, marketing and advertising are already being discussed as one of two key areas to make budget cuts. The top priority for budget cuts is, of course, “non-essential” expenses.
“Microsoft has sent us offers to “Spend X dollars, get 2X dollars free” to start or continue running ads. We have seen pay-per-click ads decrease in cost by 9% in November – December compared to the two months prior.
“By cutting advertising and marketing, especially in online advertising such as PPC, the cost of advertising in certain markets will likely decrease. This will drive a higher ROI and grow market share for the businesses that have the funds and are willing to continue investing in growth through 2023. These businesses will be in the best position to thrive in 2024 and beyond.”
Chris Glarner, Business Consultant
Smarter not Harder
With economic changes and restrictions, small business owners have found increasingly inventive ways to keep above water. And going into 2023, small business owners will likely have to double down on cost-saving that is more unexpected and creativity-driven. This financial awareness is the mindset of business growth specialist Ryan Niddel, who, along with his prediction, has an abundance of practical advice for business owners preparing for the new year.
“For many companies, 2023 will be a pivotal year in which we will be forced to handle the crisis of a potential global recession. I have taken the stance inside of my company, MIT45, to shore up the vulnerabilities that could create issues during a crisis season, and I would encourage other business owners to do the same.
“What we have done is to buy as deep as we’re able to in all material goods. This prepares us for the potential of increased expense not only on physical goods, but also on transportation. We have pulled back on wasteful spending. Wasteful spending is the creep that happens over a period of time of continuity billing on software services. It is not to eliminate fringe benefits for employees. We have also gone through our employee roster and instead of cutting back, we have encouraged personnel to exceed our expectations so that the yield that they produce is above a level that justifies their employment.
“These are all ways to prepare for an impending crisis in 2023. It becomes paramount that we go through the four Fs in a crisis – we get stuck in feelings, which is the second half, but we must first get clear on the facts that created the feelings. Once we acknowledge the feelings exist, we get clear on the facts that created them. Then we can pivot and look to the future and determine where we want our focus to go. Once we determine our focus, we can see what the fruit of our focus is. This is a simple exercise to manage the emotional response that happens during a crisis season.”
Ryan Niddel, CEO and Founder of Ryan Niddel Strategies
Cyber-Security and Cookies
It’s no news that digitalization will continue to reinvent the business landscape going into 2023. But what can small business owners expect to change, or in what ways will they have to change to keep in-toe with digitalization? Brian David Crane, e-commerce business expert and owner of several successful enterprises has very clear advice.
“2022 was a year of cyber hacks and scams. As phishing attacks and identity thefts rise, more and more businesses are compelled to rethink their data security protocols. Data security is the next frontier, and the growing relevance would mean more investments and focus on Cybersecurity.
“Without third-party cookies, consumers will have more control over their data as more intrusive ways of data gathering come to an end. Marketers will be limited to gathering data from direct sources like surveys, community polls, direct mail, mobile notifications, SMS answers, and sign-up forms. I also believe that businesses’ marketing spending will increase as they find novel ways to access first-party data and implement it productively. In a world without third-party cookies, the focus would be more on personalization as companies find creative ways of getting to know customers’ needs and pain points at a more granular level.”
Brian David Crane, Founder of Callersmart
A Stronger Year for All Businesses
While no two businesses will have the same 2023, the hope is that every business will have a better 2023 with the right mindset and education. Business owners who fully prepare and insulate their businesses have the most to gain. So spend 2023 not with the doomed chant “recession, war, defeat,” but instead think locally and insularly! Control and protect the enterprises you know best, and the rest will fall into place.