Businesses and employees have had to overcome great obstacles in the last few years.
They have witnessed a remarkable transformation in the nature of work and learned how to be flexible and adaptive.
With the emerging small business trends, employers can expect both opportunities and challenges in the years to come.
As time changes and the ways of working evolve, small businesses need to keep up with the latest trends to survive and thrive in the market.
These significant business trends can have a big impact on how your company operates and engages with clients this year.
1. Dealing with Inflation
According to a survey in The Bank of America’s “2023 Small Business Owner Report,” inflation is one of the top concerns for business owners in 2023.
Rising U.S. inflation rates, problems with both domestic and international supply chains, and other obstacles hampered the expansion ambitions of numerous companies in 2022.
Prices have increased at the highest rate in almost forty years. Supply chains across a wide range of industries are still being slowed down by the pandemic’s aftereffects and international problems like the conflict in Ukraine.
Cost of living in the United States has surged, impacting pay scales for both workers and companies as they strive to retain top talent in the current labor market.
Quick Tip: Concentrate on what you can manage. Using local or regional suppliers can help avoid supply chain obstacles. Setting up a cash flow management system can also help. It is also important to keep in mind how these difficulties, especially the inflation rate affect your employees.
2. Increased Use of Artificial Intelligence & Automation
“For small businesses, the most important thing is repetition. When you find something you do more than once that adds value … you want to look into automation.”
Frederick Townes, CEO @ Remine
Increasing small firms’ productivity and efficiency makes digital transformation one of the most pertinent business trends.
The global market for AI was valued at $36.55 billion in 2022 and is expected to grow at a CAGR of 37.3% from 2023 to 2030 according to studies by Grand View Research.
The use of cloud-based solutions by small firms is also growing for regular company activities including customer support, marketing, sales, and accounting.
Additionally, these platforms are easily scalable, which is beneficial for expanding companies.
According to IBM AI Adoption Index 2022, 25% percent of U.S. businesses in 2022 were using AI, and 43% are exploring it.
Tools such as Generative AI are capable of writing advertising copy, responding to customer service inquiries, assisting with product creation, and much more.
This is the first time that AI has become a common consumer-facing phenomenon since voice assistants like Alexa and Siri.
AI-driven automation is poised to augment current business tools by optimizing a plethora of procedures and tasks.
Additionally, automation can help produce more personalized recommendations for customers.
Quick Tip: You should consider using the latest tech tools including AI to stand out from the competition, increase operational efficiency, and expand your business. This could include chatbots, email marketing AI, and data analytics.
3. Adopting Employee Communication Apps and Mobile-First Communication
Today, millennials drive 50% of the workforce and it’s anticipated that by 2025, millennials will make up 75% of the workforce.
Millennials are distinctively tech-savvy, with a deep affinity for mobile technology and a high level of digital literacy.
Therefore, it is essential to modify communication strategies to their level and incorporate mobile-first communication to maintain attention and engagement.
Mobile communication applications provide an instant and direct line of contact between management and staff.
This real-time communication can be crucial for addressing urgent matters, disseminating important updates, and fostering a sense of connectivity among employees.
This also allows for clearer and more concise messages, minimizing the chances of misinterpretation or miscommunication that can occur in lengthy email exchanges or verbal conversations.
Interestingly enough, a recent study by Buffer concluded that 98% of workers want to continue working remotely at least in a hybrid model for the rest of their careers.
This proves that this trend is not a fad, but is here to stay.
Quick Tip: Switch to communication applications if you haven’t adopted them yet. Make sure to select an employee communication app that aligns with your organization’s needs. Popular options include Slack and Microsoft Teams. Ensure that the app adheres to robust security and privacy standards to protect sensitive company information.
4. Offering Seamless and Personalized Customer Experience
Research by Metrigy indicates that CX is the top priority for businesses looking to increase their technology spending in 2023, with 65% of them intending to do so by an average of 24%.
Customers are adopting a hybrid or omni-channel approach to shopping, expecting a seamless experience from online to in-person with the same brand.
They’re also increasingly seeking a personalized customer experience in the SMB sector, owing to the high level of competition.
With the availability of tools, small firms can now easily personalize their products and services to offer seamless customer experience.
According to a study by Salesforce, 84% of customers say that being treated like a person, not a number, is very important to winning their business.
This statistic underscores the importance of businesses prioritizing personalized interactions and tailored experiences to meet the expectations of today’s customers.
Quick Tip: Make your website user-friendly, mobile-friendly, and offer e-commerce features so that customers can quickly find what they want and make purchases from their mobile devices. Use AI and data analytics to gain a deeper understanding of your customers’ preferences and customize goods, services, and marketing initiatives to suit their requirements. Chatbots and AI-powered customer service can also be used to provide more individualized interactions.
5. Sustainability and ESG
Businesses of this decade are expected to lead initiatives to ensure that the next generation has a sustainable and inclusive future.
In fact, as of 2020, global sustainable investment assets reached $35.3 trillion, representing a 15% increase over the previous two years.
Businesses of all kinds are now stepping up their efforts to reduce carbon emissions, save energy, utilize sustainable materials more frequently, and simplify packaging.
This includes upgrading buildings to reduce heat loss, installing digital temperature control systems, turning off lights and appliances when not in use, and replacing antiquated, inefficient equipment in order to save energy costs.
The UN Biodiversity Conference (COP15) in Montreal and the UN Climate Change Conference (COP27) in Egypt emphasized the necessity for businesses to develop action plans to reduce human impact on the environment and the climate.
Furthermore, companies are being held responsible for their sustainability records by rating agencies and ESG investors.
In the long term, this is probably going to result in more novel fuels and energy kinds being adopted.
New digital tools that businesses can use to handle sustainability data and steer sustainable business practices will be adopted.
Reaching net-zero emissions can be facilitated by insights from sustainability data, whether it be through waste reduction, supply chain optimization, or emission elimination.
Quick Tip: By cutting waste, you can improve your company’s efficiency, possibly save energy costs, and support sustainability in general. You can achieve this by installing energy-friendly appliances and products, using LED light bulbs, and installing automatic taps.
6. Health and Well-being Initiatives
“Businesses will be focusing on employee engagement and happiness. Because unemployment is at historic lows, keeping employees engaged and happy is critical to retaining good people. Furthermore, many people are unhappy with the state of our country and the world right now. Keeping them happier at work … boosts productivity 10 to 25 percent.”
Scott Crabtree, Chief Happiness Officer @ Happy Brain Science
Not only do employees desire higher salaries and career advancements, but they also want to feel important and like their efforts are making a positive impact on the company.
Working in the current day has evolved, with vibrant walls, pet-friendly areas, open workplaces, and other amenities in many companies.
Well-being and health initiatives are essential to ensure that employees are satisfied with their jobs.
Employee well-being is important and has a direct impact on productivity.
Studies have shown that more than 85% of large employers offer wellness programs for their staff.
Since the goal is to retain top talent and draw in fresh talent while increasing morale and engagement, all of these initiatives are a component of the business culture.
This was well done during the COVID-19 pandemic as 88% of organizations around the world introduced flexible work arrangements including remote work in response to the pandemic, demonstrating an increased focus on work-life balance.
Quick Tip: Bring in more events and activities that focus on employee health and well-being. You can offer free yoga classes and organize health programs for awareness. You also need to ensure that your employees are not feeling overburdened and burned out. Automating tasks and streamlining operations can help with this.
7. Diversity, Equity, & Inclusion (DEI)
Diverse gender identities and gender expressions have attracted more attention in recent years.
Organizations all over the world have been attempting to address these dynamics as best they can by implementing various measures.
According to the Small Business Administration (SBA), women hold up to 43% of small business ownership.
19% of small businesses are owned by people of color, with Hispanic small business owners making up 13% of this group.
A growing number of small businesses are implementing DEI (diversity, equity, and inclusion) policies.
Many small business owners believe that diversity is essential to their operations and prioritize DE&I.
Quick Tip: Implement inclusive practices such as providing access to gender-neutral restrooms, raising awareness about the use of inclusive language for employees who identify as gender non-binary or transgender, and offering employee health benefits to those going through a transition.
Expert Insights on Small Business Trends
“AI-Supported automation can help organizations meet sustainability goals by providing ways to reduce emissions in power plants, enable carbon capture technologies, reduce outages, and facilitate hybrid systems..”
Luiz F. Gonzalez, Chief Data & AI Officer @ Aboitiz Power
“I think when we talk about organizational health, and we talk about a culture of health and well-being, all those things are important, whether it be DE&I initiatives, whether it be leadership training, or benefits and HR.”
Jonathan Gelfand, SVP @ meQuilibrium
Mastering the pulse of the current market trends is your inaugural stride towards thriving in the dynamic landscape of small businesses today.
Forge pathways to embrace cutting-edge technologies like AI and automation, leveraging them to transform your operations and craft tailor-made customer journeys.
In the contemporary small business arena, a golden key to success is nurturing exceptional customer and employee experiences. This isn’t merely a choice; it’s a mandate.
So what are you waiting for? Transform your small business with the right tools and these trends equipped.
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