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Key business trends – direct from the expert
Running an SMB can be challenging – the understatement of the year, right there. Even at the best of times, day-to-day issues make it difficult to look beyond the immediate horizon. Without a team of strategists kicking around, analysing the macro-economic or global events that could directly impact your business, it often falls into the too-hard basket.
That’s why we’ve asked our Chief Strategy Officer, Gene Sigalov, to do it for you.
At MessageMedia, Gene defines new routes to market, identifies opportunities based on emerging communication trends and leads group strategy, investments (mergers and acquisitions), and strategic projects.
Here he shares his thoughts on some of the major political, economic, social and technological trends you might face in 2023.
Inflation a growing concern (pun intended)
Since the 2007 global financial crisis, things have been pretty peaceful. The economy was growing steadily and was fairly predictable.
Things have changed. On top of the effects of extreme pandemic-related financial support measures, the economy is being battered by the invasion of Ukraine and China’s troubled economy.
While prices will (hopefully) level out over the first half of 2023, inflation has already caused dramatic increases in operating expenses for many businesses. Energy prices have soared and will probably stay high for some time yet, while supply chain issues and labour shortages are still making things tight.
At the same time, customers are starting to cut back on luxuries, saving money for now more expensive everyday items. Travel, entertainment and hospitality are already starting to feel the pinch.
Grim, yes, but not without hope.
Many experts are predicting a more positive business landscape by mid-2023. Now’s the time to keep showing that pandemic resilience, not just to see you through these next lean months, but also to take advantage of the opportunities that always come with a rapidly changing economy.
Demand will drop way down
With inflation up, everything costs more, and businesses will naturally pass on those increases to their consumers – but customers only have so much money to go around. Consumer spending has already begun to soften in many industries – as basics like fuel, food and energy go up, there’s less and less in
the budget for those extras. In 2023, we can expect customers to keep their wallets in their pockets and be far more careful with how they spend their money.
This, of course, makes life even more difficult for businesses – you have to balance protecting your margins with the risk of losing customers. A good alternative is to figure out how to do more with less – and the easiest way to do that is to bring in technology. Tools that automate work and integrate platforms can help minimise confusion, double-ups and low-value work.
Capital: tapped out, capped out
Another challenge you’ll probably face in 2023: getting your hands on capital.
That’s down to a bunch of factors – new economic policies and taxes, interest rates and lower consumer spending make for nervier banks. We’ve already seen banks approving fewer loans compared to pre-pandemic levels.
The knock-on effects will create more uncertainty among investors, making private investment more difficult to get, too. On top of all that, borrowing costs more, so many businesses are thinking carefully about making major investments.
That’s a good thing.
Any big investments need to be financially viable in the long term to deliver good returns. Before leaping into anything, it’s worth looking into other easier and cheaper ways to grow.
Things will stay spendy
Cash flow is nearly always an issue for small and medium businesses, especially when times are tough. While many businesses have seen revenue increase as we exited the pandemic, things also cost more (especially wages and energy), so profits have stayed pretty flat.
Energy prices aren’t going down any time soon, making many things way more expensive, from travel and shipping to just cooling down the office.
Wages will stay high, not just because of the labour shortage, but from political pressure and expectations around things like wage equality and paying a living wage.
Smaller businesses will find it hard to compete for talent by paying more than competitors. A smarter approach is to become a more attractive employer in other ways. Keeping staff engagement high will improve retention and build a culture that brings in new recruits.
Looking ahead
As the business world continues to grapple with the effects of a strange few years, keeping a sharp eye on key trends will be pivotal to staying on top and getting ahead of the next big thing.
How do you do that? We’ve got your covered. Read Gene’s next blog, Turn Trendspotting into Business Opportunity.
