A recent Verizon business survey polled small business owners and sheds valuable insight for business owners. There were many takeaways but these stood out the most to me from the article.
- Majority of the business owners said that business was not better than last year. This initially surprised me considering the significant decline of Covid and the removal of many of the restrictions set in place. However, the very real economic concerns related to inflation, supply chain issues, employee layoffs and so on really do take a toll on small business owners and their mindset. I recently wrote about the recession in 2009 and the general feel for other business owners I speak with is cautious optimism. As entrepreneurs, we are inherently optimistic especially when it comes to the future but the real concerns for the economy make many business owners much more cautious when it comes to hiring, marketing and spending money as if things were great. This is true for consumers also. If you are considering downsizing your marketing budget or laying off employees, I highly recommend reading Recession Time | Your Business Can Still Grow. I have spoken to numerous small business owners that mistakenly decided to slow down their marketing efforts without evaluating which avenues were and were not working. If you have to cut your marketing budget, do not do it across the board. Cut the marketing efforts that are not producing results and keep the marketing that is generating income. We suggest taking advantage of the comprehensive and free online marketing audit which can shed light on this as well as other marketing mistakes you may be making. Marketing is your lifeline and cutting it is usually the wrong decision – refining it likely is the best answer!
- Supply Chain Issues remain to be a major concern for small business owners. The supply chain issues are getting worse and it is noticeable when you go to your grocery store. The same is true with higher prices and inflation. It is not uncommon for our local grocery store to have signs up saying they are out of certain products. The pricing is noticeable as well. I drink only bottled water because I have a kidney transplant, 2 months ago the price for a 24 pack of 16 ounce waters was $2.99, yesterday the price for the exact same brand was $4.99. That is an over 60% increase in less than 2 months. Small business owners are facing the same issues with everything from office supplies to insurance. It is also directly reflected in pricing of their products or services and consumers that can wait for a year to make a purchase, likely will in order to lower their cost significantly. This can also be true in the service industry. It is important for small business owners to have an updated marketing plan focused on the new realities of the economy we are in. We highly recommend performing a meticulous competitive analysis to understand your strengths and weaknesses as compared to your competition. In this economy you need every possible advantage to grow which is very realistic if you know your target market, understand your competition and have a strong digital marketing presence.
- 82% are worried about price increases/inflation. As discussed above this is a very real concern for all business owners as evidenced through the massive layoffs and cost saving measures enacted by both small and large companies. It is a concern for employees as well which also makes it a very real concern for consumers. The trickle-down effect is far more advanced than I could explain but also common sense. This subject alone requires business owners to plan ahead for the worst case scenarios which inherently change the level of optimism which then changes strategic business decisions they make. We recommend that as a business owner you make well thought out and educated decisions keeping the emotions out of it. Following your gut instinct is a good idea but backing up your gut instinct with data reinforces your decision but also brings reality into the decision making process. There is value to getting input from a business consultant that will give you a different perspective that you can use in your decision making process. The Business Owner Consulting Program was built for small business owners understanding they cannot be experts at everything by providing real world and actionable advice from employee management to digital marketing.
- According to the SEC, over 50% of small businesses close after a successful data breach or cyber-attack. Cybersecurity concerns grew from 31% in 2021 to 55% in 2022. Cybersecurity should be a high concern for all small businesses because it is a realistic and constant threat occurring 24 hours a day, 7 days a week. There are dozens of simple steps that small businesses can take to protect their companies from this happening to them – but ignoring the inevitable is one of the largest mistakes you can make. According to CNBC43% of all cyber-attacks are focused on small businesses which cost the small business an average of 3 million dollars per incident (IBM). Many small businesses do not have a cyber security plan to prevent attacks or a reaction plan. Data security is vital and developing a plan to protect your business and your customers should be a top priority. If you do not currently have a plan the best time to start is immediately. We do not offer these services but know a few great companies that do.
- 61% invested in technology in the past 2 years to better serve their customers. Customers are the lifeline of any business and creating a system that provides an exceptional customer experience is essential to growth. An exceptional customer experience varies by industry and business type. A med spa will have different goals than a law firm but both are services giving them commonalities. If your business is selling products online or you are a brick and mortar store your customer experiences will be based on different metrics. The most important thing that small businesses can do is understand who their customers are and what they value the most. They can then create customer experiences focused on those specific goals. Customer service in all industries is pivotal to long term success and through analyzing data and trends you are able to identify exactly what is most important to your customers. We recommend for all small businesses to take the time to learn everything you can about effective customer service as well as auditing your strengths and weaknesses. If interested we recommend a customer service audit.
- 72% are worried about their financial security. Entrepreneurs understand the risks and rewards with starting their own business and the daily struggles they face. According to CNBC 34% of small business owners lack a retirement savings plan. I think this is always an issue for small business owners and something we all need to pay more and more attention to. It is easy to reinvest in the business for growth opportunities but equally important is setting money aside so that you have an exit plan outside of potentially selling your business. We tend to focus so much on the now and forget about retirement. So many things can happen in business and it is important to protect your long term finances and comfort. If you have not really put much thought into retirement, despite it feeling forever away – the time to start is now. Here is a simple retirement calculator which can give you some simple math with realistic feedback. Ignoring your financial security is almost as bad of a decision as ignoring your health. There are tons of great financial advisors out there or just simply start with a simple service like Vanguard or Ameriprise.
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