Hello Alice surveyed 2,635 small business owners to get a deeper look into their perspectives and challenges heading into the new year. Published in partnership with Mastercard, the research revealed four important small business trends to look out for in 2023.
This upcoming year will push small business owners to take risks and focus on new aspects of business ownership.
Of the small businesses who participated in the survey, 69% cited the impacts of inflation throughout 2022 as declining the success of their businesses. This led them to increase and adjust pricing of their products and services. 70% of small business owners also applied for financial assistance to resolve inflation-based issues in the past year, with an additional 70% planning to do the same in the upcoming year.
Loss of customers regarding price increase (57%) and inability to gain new customers (54%), are recorded as the top concerns for 2023. To steer clear of these consequences, small business owners must maximize their marketing efforts in the upcoming year.
“In response, small business owners must learn best practices and explore software solutions to optimize their marketing efforts for the coming year," says Elizabeth Gore, Co-founder and CEO of Hello Alice, per Forbes.
The current outlook suggests a possible recession. Owners expect to hire twice as many people in 2023 as they did in 2022. However, 65% of business owners are concerned about a prospective recession, which they believe will lower sales, limit cash flow, and make financing more difficult to obtain. Throughout 2023, small businesses must be even more attentive to budgeting and the financial aspects of their businesses in a progressively challenging economic atmosphere.
“Through research and conversations with our clients, it's clear that most business owners are resolute and optimistic heading into 2023. While business owners anticipating a recession may force them to raise prices and reduce spending, entrepreneurs are focusing their efforts on marketing and promoting their businesses, investing in new technology, and boosting headcount,” said Sharon Miller, President of Small Business/Head of Specialty Banking and Lending at Bank of America, per Forbes.
Despite the hardships small businesses have faced in recent years, owners reported their strong optimism for business in the upcoming year. 64% of surveyed owners mentioned their sales improved or were about identical in 2021. Additionally, 57% of owners' businesses performed as expected or better in 2022. Finally, 73% of surveyed owners predict their businesses will grow in 2023.
Dave Charest, Director of Small Business Success at Constant Contact, explained how cultivating a strong customer community will be key in 2023.
“Small businesses must lean on their communities and the great experiences they can provide customers. Bigger brands may have bigger budgets and more exposure, but they can’t offer the same inventory, customer service, or experience that a small business can. Despite what you might read in the headlines, small businesses are tough and will get through whatever 2023 has to throw at them." Charest said, per Forbes.
Small businesses are more than capable of successful outcomes in 2023, regardless of the odds stacked against them. If they are able to plan strategically, 2023 will be a year of growth for startups and small businesses. But, individuals must progressively take direction of their own futures instead of being dominated by large companies.