As companies brace for the uncertainty of 2023, there’s still cause for optimism as consumer demand remains strong and revenue growth among mid-market organizations is at an all-time high.
Here are five key trends that could shape outcomes across small and mid-market businesses (SMBs) in the upcoming year!
5 trends to look out for in 2023
- Recession: Despite predictions of a recession in 2023, the present labor 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, an increased focus on understanding supply chain impacts and scope 3 carbon emissions is essential. Governments are calling for net zero policies to reduce reliance on fossil fuels. The United States is aiming to become entirely carbon emission-free by 2050.
- Talent acquisition and retention: In 2023, the challenge of acquiring and maintaining highly talented employees will be more difficult than ever due to an ongoing trend of resignations. Particularly for small businesses that have higher recruitment costs, getting staff internalized in their roles and motivated to stay is a top priority.
- Digital transformation: Digitalization is set to continue. Digital transformation and automation are key to the future success of SMBs and mid-market businesses.
- Metaverse: The metaverse will revolutionize how people work and live with a captivating combination of virtual reality, augmented realities, and three-dimensional experiences.
How must small and mid-market businesses plan for 2023?
Prepare for recession
- In order to manage risk and retain an agile cost structure and business model, it is important to plan ahead for periodic downturns in sales and profits.
- Utilize strategies to build strong relationships with key customers, partners, and investors, while remaining transparent when making pricing changes.
- Additionally, assess supplier partnerships to identify opportunities for renegotiating contracts or outsourcing certain areas of the business.
Doing so will help ensure long-term cost savings and resilience against external challenges.
Promote sustainable practices
- Adopting 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 preventing waste and emissions.
- Furthermore, all businesses should strive to build sustainability into their supply chain practices in order to develop a net zero plan. This will help minimize risks of reputational damage due to supply chain disruptions, yet organizations must also take special care to protect themselves from potential ESG-related litigation.
- It is important that companies are honest and truthful about their “green” impacts given the ever-growing trend for ‘greenwashing’. Taking these measures will assist in promoting sustainable development.
Attract and retain talent
- For SMBs navigating a market downturn, it can be difficult to compete with larger companies in terms of salary and benefits packages.
- As such, finding effective recruiting strategies beyond traditional benefits directly tied to salary is essential to ensure talent retention.
- Ideas such as providing employees with growth opportunities, creating favorable work-life balance parameters, implementing mentoring programs, and offering a flexible hybrid workplace can all help SMBs remain competitive in the market space.
- Understanding employee mindset ahead of external offers is also key for resolving any issues that may occur if not dealt with quickly and effectively. Taking this proactive approach will give SMBs a better chance at maintaining their current talent base during tough times.
- Digitization can provide companies of all sizes with powerful efficiency-boosting and cost-cutting 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 more quickly and effectively.
- Digitized data can be pulled from multiple sources faster, making it easier for small businesses to gain insights 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 providing a better experience for employees and customers alike.
Capitalize on metaverse
- SMBs can stand to benefit greatly from the use of 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 demonstrations and virtual shopping environments that replicate physical stores, SMBs have opportunities to increase brand presence and customer engagement in high-impact ways across the globe.
- SMBs seeking to increase their market share through integration into the virtual world will find that a metaverse provides them with the tools and flexible platforms needed for success.
- A 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 ground-breaking technology. SMBs must acknowledge this if they wish to make the most of new opportunities and access valuable data about their customers’ trends in behavior.
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 of the curve.
Leveraging the latest trends and developments, SMBs can anticipate customer needs in order to keep up with the evolving digital landscape. This can provide SMBs with a major advantage when it comes to understanding what is needed for success both now and in the future. By being mindful of these insights, SMBs will have access to plentiful growth opportunities that may have otherwise gone unnoticed.
Source: Wolters Kluver
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