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The past year has brought much more stability despite inflation remaining a huge concern, and although it was tough, many businesses found success in connecting with customers and driving growth.
Our 2024 Small Business Sentiment Survey offers invaluable insights into the pulse of these businesses, as they navigate an uncertain economic environment with remarkable resilience.
Let’s take a closer look at our findings and what we can expect from the coming year.
A Look at 2023
The survey revealed that in 2023, a majority of businesses experienced a revenue increase compared to the previous year, with 60.18% reporting growth. Although the majority were successful in mitigating any new expenses, the burden of operating costs also saw an increase. Many (46.18%) saw an increase greater than 10%, while 30.91% experienced a less than 10% increase in operating costs.
A total of 67.31% of respondents reported being able to pass all or some of these new costs on to consumers through price increases, lessening the blow to their bottom line, while 31.97% absorbed the total costs, directly impacting margins.
Revenue Trends and Operating Costs in 2024
Businesses remain optimistic about the future, with a large percentage (59.45%) expecting revenue increases and 31.19% anticipating no change in their revenue, giving a generally positive outlook for 2024.
This optimism is not just limited to revenue projections but extends to operating costs. Even though a significant number (over 70%) anticipate some kind of increase, the overall sentiment remains positive with businesses preparing to face these challenges head-on.
Challenges with Our Current Economic Environment
Understanding the hurdles we are faced with helps prepare us for sustainable growth. Here’s what our survey uncovered as the biggest concerns in 2024:
- Inflation (46.06%) – Many businesses are worried about rising costs eroding consumer purchasing power and affecting profit margins.
- Recession (25.32%) – A notable percentage fear an economic downturn, which could result in less consumer spending and a decline in revenue and profits.
Not only that, we are also faced with the following operating burdens:
- The lack of capital and cash flow has emerged as the number one operating burden according to our respondents (30.26%), highlighting the need for better financial management practices.
- Recruiting and retaining employees is another major concern, with 21.24% expecting challenges to persist in 2024.
- Finally, 25.19% report marketing and advertising expenses as another issue, driving the need for more effective, analytics-driven marketing strategies to improve ROI.
Investment Opportunities with Digital Marketing in 2024
Although the uncertainty of the future seems to threaten small businesses, there are still major opportunities to leverage. As the number one priority for increased investment (29.54%), digital is leading the way! With so many businesses choosing to emphasize digital marketing, it’s become more than just a trend. Consumer behaviors have evolved with an increase in online platforms and digital opportunities.
Hidden Success from the Power of Your People
Your people are your profits… or rather, they are what make you profitable. So you should be investing in them in 2024. But we aren’t talking about your customers here. Your competitive edge lies in empowering your staff.
According to our respondents, hiring and retaining employees remains the second largest investment priority (23.85%). In addition to this, 16.88% intend to increase their workforce while 65.50% plan to keep the same staff size. Although this is the case, maintaining the same staff size is not merely a strategy of cost containment, it’s an opportunity to maximize the potential of your existing workforce.
Adapting Strategies for Sustainable Growth
Based on our findings, optimism and strategic planning are sure to define the year ahead. If you’re ready to use the momentum you’ve gained in 2023 to carve out real opportunities for growth, contact the experts at UpSwell Marketing. With a free marketing assessment, you can start the journey toward achieving your goals in 2024 and beyond.
