Headlines about rising inflation, supply chain disruptions, hiring difficulties, and global unrest dominated 2022. In addition, other stressors, such as new technologies and evolving customer demands, continue to make the return to more routine operations difficult. Yet, in the face of these economic uncertainties and societal issues, business owners feel optimistic about their business in 2023. Discover both the certainties and uncertainties facing business owners in 2023.
What are the expectations placed on business owners in 2023?
Challenges and opportunities lay ahead for business owners in 2023. Some top threats facing business owners in 2023 include inflation, worker attrition, and increased customer expectations. Yet small business owners are optimistic about the future, with over half planning to expand their business and 66% expecting revenue to increase.
3 Threats Facing Business Owners in 2023
Threat #1: Inflation
Caused by labor shortages and supply chain disruptions, inflation has played havoc with pricing throughout 2022. Businesses have seen rising costs for everything from raw ingredients to labor. According to a report from Bank of America, small business owners identified inflation and commodities prices as their primary concerns for their business. In addition, a strong majority also identified inflation as an issue that will continue to impact their operations moving forward.
No matter what industry you are in, rising inflation is a key uncertainty facing every business. In the U.S., inflation has seen 40-year highs, with significant year-over-year Consumer Price Index increases. Beyond the immediate rise in costs, inflation creates additional difficulties for small businesses, influencing hiring, spending, and other planning decisions.
What Businesses Owners Can Do:
To remain competitive during inflation, business leaders should pay close attention to their productivity and efficiency, adjust expenses, strengthen their pricing power, and eliminate unnecessary work.
Threat #2: Worker Attrition
There has been a fundamental shift in how employees view their jobs and what benefits are most important. About 4 million people have left their jobs each month over the last 12 months, making worker attrition and retention more difficult for employers.
Businesses across various industries face the challenge of filling their workforce with high-quality employees. In 2022, 3 out of 4 businesses reported difficulty hiring the talent they needed. As a business owner, employees are your greatest asset, and hiring the right employees is one of the most important things you will do to grow your business.
What Businesses Owners Can Do:
To attract top-tier candidates, companies need to develop a strong employee value proposition (EVP) that defines your company, what it stands for, and what makes it unique. Companies that can more clearly express the benefits and rewards they offer have a greater advantage when attracting the skills and employees they desire.
Threat #3: Increased Customer Expectations
The types of disruptions businesses have faced over the last few years, such as labor shortages and supply chain issues, can quickly combine to create operational challenges that can easily lead to decreased customer satisfaction. With that, customer experience is rapidly becoming a key differentiator among businesses. As customer expectations increase, it’s more important than ever to stand out from competitors.
What Businesses Owners Can Do:
If you want to meet and exceed customer expectations, you must listen closely to what your customers tell you. Three best practices for customer experience and retention include:
- Personalize the customer experience
- Make interactions meaningful
- Help customers save time
- Focus on what your customer wants to achieve
Opportunities for Business Owners in 2023
In 2023, business owners want to increase revenue, expand into new markets, and identify potential new opportunities,
Opportunity #1: Increase Revenue
According to a report from Bank of America, over the next 12 months, 66% of business owners expect revenue to increase, representing a seven-year high. Profitability is at the core of any business, and owners often look for ways to increase their profits. Two main ways for a business owner to increase profits are to either increase revenue or cut costs.
How to Increase Revenue:
A primary way businesses can increase revenue is by selling more products. To do this, companies can focus on upselling, cross-selling, actively encouraging repeat business, and attracting new customers.
Opportunity #2: Business Growth
The same report from Bank of America also pinpoints that more than half of business owners plan to expand their business in 2023, up from 37% in the spring of 2022. Business growth is an important component of running a successful, thriving business. To achieve long-term success, organizations should consider the following:
- Outsourcing – grow your business more efficiently and maximize your productivity through outsourcing. Outsourcing tasks such as payroll or marketing frees your employees to focus on core business operations.
- Marketing – Placing a focus on your marketing will keep your business top of mind with customers and prospects. Now is the time to invest in a better web presence, search engine optimization, email newsletters, and promotional items and apparel.
Our Advisors Can Help Prepare Your Business for 2023
Safeguard Advisors know every business’s goals are different, so your advisor will learn about your unique goals and help you execute personalized strategies that fit your business. You can trust your local Safeguard Advisor to help meet your time, productivity, and business needs.
By working with a Safeguard Advisor, you can receive expert help with products, services, and advice that make managing and marketing your business easier and more effective.
- New reports show business owners will feel optimistic about their businesses in 2023.
- Three top threats facing business owners in 2023 include inflation, worker attrition, and increased customer expectations.
- In 2023, over half of the small business owners plan to expand their business, and 66% expect revenue to increase.
- Your Safeguard Advisor can help you prepare your business for 2023 with personalized strategies that fit your business.