2023 Small Business Success Means Prioritizing Innovation And Change
Navigating the financial landscape has become a full-time job. For leaders of small and medium sized businesses hoping to get a grasp on the economic outlook for this new year, there seems to be one overriding point of agreement among the experts: 2023 is a year of uncertainty. And according to the latest National Federation of Independent Businesses (NFIB), the small business optimism index declined 2.1 points—which is why now more than ever both businesses and the financial institutions serving those businesses need to adapt.
In 2022, interest rates increased seven times, and inflation had its highest increase in 40 years—and as the outlook for 2023 remains challenging—the environment today requires constant navigation—both from banks and businesses. Successful entrepreneurs and managers are increasingly relying on banks like ours that specialize in helping businesses succeed to serve as their trusted advisors and help secure their market position amid the turbulence.
Whether the issue is new financial regulations or economic fluctuations, working with a bank that is FDIC-insured and has banking experts who can provide sage counsel and vital information to help you thrive in the year ahead is key.
Here are three top suggestions that will help businesses navigate the uncertainty of 2023:
Investing in Innovation
In 2023, it’s no secret that in order to survive, businesses need to innovate as they look to stay competitive and provide better services for their clients. Innovation is happening in almost every industry, from real estate and construction to healthcare and the legal sector.
We say many businesses turn to technology to find new ways of running their businesses, and today we are seeing many of them expand on those financial investments. This collective embrace of new development creates cost effective opportunities for business leaders to modernize their current procedures.
While innovation continues to be a great way to create efficiencies for your business, it’s also critical to maintain a compliant and diligent mindset. One only has to look at examples over the past year of people falling victim to the downfall of FTX and an increase of cyberattacks to know that while you are innovating and looking to take advantage of new systems etc., one can’t let your guard down when it comes to oversight in your business.
Cultivate Tech Talent
To remain competitive, and lean into technology for your business, don't wait to also hunt for promising tech talent. And with the wave of tech layoffs that started last spring remaining in full force, now is an optimal time to bring in senior level expertise to help double down on technology. Having a deep tech bench in place allows organizations greater agility and speed in responding to technological changes, identifying emerging problems, and implementing the solutions that will work best.
Small businesses that are financially strapped may also want to consider hiring gig or part time tech specialists that are on call and can be advisors for needed changes. At the same time, upskilling and training your current employees can help in the long run. Loyal, dedicated, and empowered employees have the motive and the opportunity to create products and services that could eventually prove to be game changers.
Plan for Tough Times
The power of correct planning while navigating difficult economic storms is the difference between those that survive and thrive and those that don’t. Nimble organizations with significant cash reserves are the ones that can afford to remain curious, opportunistic, and innovative when their competition is adopting a bare-bones survival strategy that will ultimately impede long-term growth.
When determining a business plan, there are far more factors to consider now than there were three years ago. Last year saw a significant increase in both inflation and interest rates—understanding how these economic changes impact your businesses finances will play a big role in how you plan for the year ahead.
Assessing the areas of your business that are profitable vs. the areas that aren’t, will provide you with the visibility to make necessary changes. It will also determine whether you are in a position to take advantage of emerging opportunities or remain conservative with your investments until the clouds start to clear.
As we head deeper into 2023, forecasts are more optimistic than they were in December when Bloomberg reported that economists were placing the chance for a U.S. Recession at 70%. But there’s little doubt that turbulent days are ahead and those are times in which emerging businesses prove their mettle.
By doubling on the commitment to reinvest in themselves, and leveraging the capabilities of their trusted partners, high-growth businesses can turn this year of uncertainty into a period of strong reinforcement that paves the way for long-term success.
This article was written by Frank Sorrentino from Forbes and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.
