It’s no secret that small business owners have faced several challenges in the past few years, with increasing costs and a highly competitive market. We recently released our annual Small Business Owner Sentiment Survey, highlighting the positive outlook for 2023.
Positive Insights Despite Uncertainty
Our survey showcased inspiring results; out of over 500 small business owners across the U.S., an impressive 90% projected their revenue to stay at the same level or exceed the amount they achieved in 2022. This illustrates just how optimistic and resilient small business owners are as they look toward 2023.
Despite the uncertainty of the current economic climate and rising inflation, businesses remain positive about the future. According to the survey data, 66% of companies believe they will have greater success in the coming year.
Fortunately, the operating burden of recruiting and retaining employees experienced a 10-point drop, and supply chain disruptions saw a substantial 15-point drop — a much brighter outlook than the previous year. This is encouraging and provides some positive insights during a time of economic difficulty.
Breaking Down the Numbers: Costs Continue to Climb
Our survey respondents consider inflation the leading concern in 2023 (47.69%), with a 17-point increase from last year. An economic recession was also cited as a major business concern and was the topic of much discussion surrounding its impact on 2023 as more and more households are limiting their spending.
Other key insights regarding business spend and operating costs:
- Many businesses have had to shoulder the burden of increased operating expenses in the last year. Seventy-three percent stated they experienced increased costs, while 68% of those businesses passed some or all of the expenses to the consumer. Almost all of our respondents predicted this trend and expect the same for 2023.
- We found that the lack of capital and cash flow is causing an even bigger strain on operations in 2023. Thirty-five percent of respondents stated this is their biggest operating burden, while recruitment and retention of employees came in at number two, with 22.1% — a trend that has flipped from the previous year, where cash flow was the second most significant strain on operations. Stabilizing operating expenses, increasing cash flow, and prioritizing strategic investments will be paramount this year.
- Now that employee retention is no longer the number one operating burden, businesses aren’t as concerned with increasing their number of employees. Based on the survey, 70% plan to retain the current staffing size.
The Rising Demand for Marketing Investments
We found that businesses primarily want to increase their investments within digital marketing for 2023. Over 46% of businesses said they plan to devote more resources to marketing tactics in the upcoming year, which includes an increase in digital marketing (31.32%), direct mail marketing (7.3%), and traditional marketing (7.65%). These figures indicate a clear trend of the increasing reliance on digital solutions to reach a wider audience and improve brand awareness.
We have seen that the most effective marketing plans integrate both digital and direct marketing solutions. By combining direct mail with digital marketing initiatives, businesses will see impactful, measurable returns from their marketing efforts in 2023.
To download the full survey, please click here.