Top 7 Small Business Trends To Know for 2023
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Last Updated: 01/26/2023
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Emerging small-business trends represent the challenges and opportunities that exist for employers in 2023. Over the past few years, businesses and their employees have faced enormous hurdles, undergone an incredible amount of change in the ways work is done, and have had to practice adaptability and flexibility. There's no reason to believe this will change anytime soon. Here are some notable trends in business that could have significant impacts on the way your business works and interacts with customers this year.
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Small Business Trends in 2023
The emerging trends outlined below represent several shifts in the business world that are important to keep an eye on and embrace in a way that makes sense for your organization.
Inflation and Supply Chain Issues
We were inundated in 2022 with headlines about U.S. inflation rates, domestic and global supply chain issues, and other hurdles that threw a wrench in many businesses' plans for growth. The reality is we don't know exactly what will happen in 2023: currently, prices have increased about 8 percent, the highest they have been in nearly four decades, and lingering impacts of both the pandemic and global issues such as the war in Ukraine continue to stall supply chains for many industries.
Businesses should focus on controlling what they can. This may mean using local or regional suppliers to circumnavigate supply chain slowdowns, or putting a system in place to manage cash flow. And don't forget how these challenges, particularly the rate of inflation, impact your employees. The cost of living in the U.S. has skyrocketed, affecting both employees' salaries and employers' budgets as they try to remain competitive and keep great workers in today's labor market. So while employees may be voicing concerns about pay raises, employers need to weigh factors such as competition in the labor market, budgets, and business projections to determine whether pay increases make sense this year.
The Expectation of Seamless Customer Experiences
The pandemic accelerated a shift from brick-and-mortar stores to digital shopping. From groceries to clothing and other consumer goods, shopping entirely online with the option of home delivery or curbside pickup continues to offer customers convenience, efficiency, and even a sense of personal safety.
Although digital experiences have now become common, consumers' shopping habits are shifting yet again. Whether driven by increased awareness to reduce monetary and carbon costs associated with shipping, lending support for their local economy, or simply wanting the experience of shopping in-person again, consumers are embracing a hybrid or omni-channel approach to shopping, with the expectation that there will be a seamless experience as they go from online to in-person with the same brand. They will interchange visits to brick-and-mortar stores, use mobile apps, and shop online to make choices that support their needs and beliefs.
To ensure success, small-business owners should make sure they have a mobile-friendly, easy-to-navigate website with e-commerce options that allow consumers to quickly find what they want and purchase products or services from their mobile devices. The same attention to detail should be applied to "traditional" shopping methods. Look for ways to continue the convenience of blending the two such as curbside pickups, and make sure your in-store customer service leaves customers with a positive experience.
The Rise of Voice-Assisted Technology
As part of the digital transformation that continues to effect change in business, employers are increasingly exploring new ways to use voice technology, both externally to appeal to tech-savvy customers and internally to improve their own business processes. As we mentioned above, customers have come to expect a seamless experience between online and in-person interactions with a business. Companies that embrace voice technology — whether it's leveraging virtual assistants and chatbots to provide service 24/7 or optimizing a website for voice search — stand to gain a competitive edge in 2023 and beyond.
Voice-assisted technology that improves business processes is another part of this emerging trend, particularly since it can expedite critical tasks for small business owners. Take voice-enabled technology for running payroll, where administrators can receive real-time payroll data insights, review and approve rate changes, add new employees, and submit checks for payday — all secure and completely hands-free.
Increased Focus on Sustainability
Growing concerns around how habits, purchasing decisions, and lifestyles impact the environment have cemented the issue of sustainability firmly in many customers' decisions — from which companies they do business with to the types of goods and services they choose to buy or not.
To not only effectively embrace this trend but also respond meaningfully, employers need to take responsibility for implementing meaningful change in their practices to reduce the environmental impact of their business model. Look for opportunities to reduce the energy consumption and greenhouse gas output of your supply chain, assess your internal practices to reduce waste, embrace remote or hybrid workplaces for employees, and evaluate your own business' long-term environmental impacts in the form of packaging and product lines. Ultimately, these are measures that can help your business gain a hiring advantage and increase its own resiliency through being more efficient and responsive to environmental pressures.
Alternative Payment Options
As payment processing evolves and more options become available for safer non-cash transactions, consumers are using mobile, card, and alternative payments more often. The onset of new technology, combined with the rising demand for contactless payments, has further hastened the shift away from cash transactions. Small-business owners should continue to expect increased demand for alternate payment options in the form of applications, mobile wallets, and wearable devices. If they haven't already done so, it's critical that small businesses research contactless payment options. Fortunately, this trend reaps benefits such as a business' ability to leverage the systems to increase sales, improve cash flow, and reduce the risk of accepting fraudulent currency.
Continued Focus on Talent Management
The past year presented businesses nationwide with unprecedented challenges around hiring, and overall talent management. Historically low unemployment levels, the Great Resignation, layoffs in the technology sector, and quiet quitting were just a few examples. To address ongoing talent management challenges, small businesses need to have a firm understanding of what future and current employees want from their employers, what motivates them, and what it will take to keep them for the long term. This might mean offering long-term remote work options or hybrid work spaces, embracing new technology and software solutions, evaluating incentives and benefits that you offer, or putting a renewed focus on employee development and promoting from within.
While certainly not new, a focus on HR compliance should always be top of mind for businesses of all sizes. The number of employment laws and regulations are on the rise, and the risk of penalties for non-compliance has perhaps never been greater. For example, we may see an uptick in business audits, as the Inflation Reduction Act passed in summer 2022 included additional funding for the Internal Revenue Service (IRS). Overall, there should be a clear strategy for bridging the gap between the company's growth trajectory, objectives, and compliance practices that influence activities such as hiring, employee development, and retention. If you haven't done so in the past, this year may be a perfect time to develop an HR compliance checklist that serves as a compass for compliance-related areas.
Which Industries Are Projected to Boom in 2023?
Despite a currently strong labor market, an economic downturn could lie ahead. We may also continue seeing employees leaving their jobs to launch their own entrepreneurial pursuits. Still, some industries are projected to boom in the upcoming years, as forecasted by the U.S. Bureau of Labor Statistics:
- Healthcare and medical research: The COVID-19 pandemic caused a higher public demand for medical and scientific research and development related to infectious diseases. Finding ways to mitigate viral spread and developing treatments and vaccines have been fast-growing areas of interest in the wake of the pandemic.
- Computer and IT services and security: With many workforces embracing remote work for the long-term, there continues to be a strong demand for computer and IT services, support, and security.
- Leisure and hospitality: Since so many businesses in leisure and hospitality were hit hard during the pandemic, it's anticipated that there will be considerable growth in this sector as it rebounds to pre-pandemic levels, and people look to resume traveling and spending more time outside the home with loved ones.
- Professional and business services: The BLS projects that about 1.5 million jobs will be added in this industry within the next decade, an increase that includes growth in computer systems design and related services, as well as management, scientific, and technical consulting services.
Use Emerging Trends in Business To Drive Your Success
Considering these and other small-business industry trends, along with your many responsibilities as a business owner, you may want to find support to help you meet your goals in 2023. You may be able to outsource many of the duties that require valuable time and resources, such as HR administration, payroll, and assistance with regulatory compliance.