As businesses prepare for the uncertainty of 2023, there is still cause for optimism as consumer demand remains strong and revenue growth among midmarket organizations is at an all-time high.
Here are five key trends that could shape small and medium-sized business (SMB) outcomes in the coming year!
5 trends to watch out for in 2023
- Recession: Despite predictions of a recession in 2023, the current job market and consumer spending indicate that its effects may not be too severe.
- Net zero emissions: As more and more companies prioritize climate action to meet the demands of their stakeholders, a greater focus on understanding supply chain impacts and Scope 3 carbon emissions is essential. Governments are calling for policies net zero to reduce reliance on fossil fuels. The United States aims to be completely zero carbon emissions by 2050.
- Acquisition and retention of talent: In 2023, the challenge of acquiring and keeping highly talented employees will be more difficult than ever due to the constant trend of resignations. Particularly for small businesses that have higher hiring costs, getting staff internalized into their roles and motivated to stay is a top priority.
- digital transformation: Digitization is ready to continue. Digital transformation and automation are key to the future success of SMEs and midsize businesses.
- Metaverse: The metaverse will revolutionize the way people work and live with a captivating mix of virtual reality, augmented reality and 3D experiences.
How should small and medium-sized businesses plan for 2023?
Prepare for the recession
- To manage risk and maintain an agile cost structure and business model, it is important to plan ahead for periodic declines in sales and profits.
- Use strategies to build strong relationships with key customers, partners, and investors, while remaining transparent when making price changes.
- Also, evaluate vendor associations to identify opportunities to renegotiate contracts or outsource certain areas of the business.
Doing so will help ensure long-term cost savings and resilience against external challenges.
Promote sustainable practices
- Embracing a circular economy is an essential step in achieving long-term sustainability. Low carbon practices should be implemented to facilitate the effective and efficient use of energy and resources, thereby minimizing or avoiding waste and emissions.
- Additionally, all companies should strive to embed sustainability into their supply chain practices in order to develop a net zero emissions plan. This will help minimize the risks of reputational damage from supply chain disruptions, but organizations must also take extra care to protect themselves from potential ESG-related litigation.
- It is important that companies are honest and truthful about their ‘green’ impacts given the increasing trend of ‘greenwashing’. The adoption of these measures will contribute to promoting sustainable development.
Attract and retain talent
- For SMEs experiencing a market downturn, it can be difficult to compete with larger companies in terms of salary and benefit packages.
- As such, finding effective recruitment strategies beyond the traditional benefits directly tied to salary is essential to ensure talent retention.
- Ideas like providing employees with growth opportunities, creating favorable work-life balance parameters, implementing mentoring programs, and offering a flexible hybrid workplace can help SMBs remain competitive in the market space.
- Understanding the mindset of employees prior to external offers is also key to resolving any issues that may arise if not dealt with quickly and effectively. Taking this proactive approach will give SMBs a better chance of maintaining their current talent base during difficult times.
Prepare for the future
- Digitization can provide businesses of all sizes with powerful efficiencies and cost reduction opportunities, but SMBs have an inherent advantage due to their smaller size.
- Because there is less bureaucracy in smaller organizations, communication and collaboration can happen faster and more effectively.
- Digitized data can be pulled from multiple sources faster, making it easier for small businesses to gain insight and inform their decisions.
- These advantages mean that SMBs are uniquely well positioned to take full advantage of digitization efforts, maximizing operational efficiencies, better understanding customer needs, and delivering a better experience for both employees and customers.
Capitalize on the metaverse
- SMBs can greatly benefit from using a metaverse. In a metaverse, SMBs can leverage their existing resources to create immersive virtual experiences with low overhead costs.
- From online learning spaces to virtual product demos to virtual shopping environments that replicate physical stores, SMBs have opportunities to increase brand presence and customer engagement in high-impact ways around the world.
- SMBs looking to increase their market share through integration into the virtual world will find that a metaverse provides them with the tools and flexible platforms necessary for success.
- One survey found that 60% of female executives have implemented at least two metaverse-related projects within their organizations, indicating how women are positioned to lead from the front when it comes to this innovative technology. SMEs need to recognize this if they want to take full advantage of new opportunities and access valuable data on their customers’ behavioral trends.
SMBs are playing an increasingly important role in today’s rapidly changing society as they challenge predictive norms and rely on data, artificial intelligence and predictive analytics to stay ahead.
Taking advantage of the latest trends and developments, SMBs can anticipate customer needs to keep up with the evolving digital landscape. This can provide SMBs with a huge advantage when it comes to understanding what it takes to be successful both now and in the future. By taking these insights into account, SMEs will have access to abundant growth opportunities that might otherwise have gone unnoticed.
Fountain: Wolters Klüver