The COVID-19 pandemic is now a thing of the past, and businesses are roaring back to life again. But the roar isn’t as loud as it should be because interest rates are rising and the economy is slowing down.
As a small business owner, you’re wondering what this mixed bag of fortune means for your enterprise. The hard truth is that although the pandemic’s restrictions no longer exist, the harsh economy is sinking many small businesses.
This is why you need to know what it takes to find business success this year. In this guide, you’ll find tips, ideas, and strategies to drive business growth in a year that’s turning out to be more challenging than expected.
Unless your business was in the essential services sector, you certainly shut down or went remote soon after the coronavirus pandemic struck. Going remote on short notice might have caught so many businesses off-guard, but the model can save you money and spur greater employee productivity.
However, with the pandemic behind us, many businesses that had gone remote are now resuming office operations. Remote work isn’t for every business, no doubt, but if you’re a small business, you may want to consider staying remote – or at least some of your operations.
First, over 60 percent of workers who were remote during the pandemic don’t want to return to the office. In fact, they would rather resign. So, if you have a return-to-work policy, you could lose some of your employees.
Second, remote work is a real cost saver. If most of your employees are working from home, for example, you can relocate the business to a small office space and reduce your rent expenses significantly.
Keep in mind that consumers are reducing their spending to shield themselves from rising inflation. Your business revenue will fall, so it’s prudent to keep your expenses as low as possible; otherwise, you will crash into a cash crunch.
Focus on Customer Retention
New customer acquisition can cost about 5 times more than the cost of retaining an existing customer. Of course, your business needs to bring in more customers, but in a challenging economic environment, it’s more prudent to scale down your customer acquisition efforts and focus on your current customers.
Achieving high customer retention ensures your business maintains its revenue. It can also provide an opportunity to make more sales. You just need to find an effective way to make your current customers increase their spending on your business.
For example, you could introduce a customer reward program. With attractive rewards up for grabs, your customers might be more inclined to buy more.
Run a Lean Workforce
Employees are the lifeblood of your organization, but they can also be the reason it collapses. And no, we aren’t talking about employee sabotage. We’re talking about what can happen when you’re running a bloated workforce.
For many small businesses, labor is the biggest expense. If you have more employees than necessary, you’re losing money and putting the operational efficiency of your company in jeopardy.
In 2023, you need a lean workforce, especially if one of your goals is to cut operating costs. Conduct a workforce audit and establish whether you’re understaffed or overstaffed. If you have more employees than needed, you might need to make the difficult but important decision and declare redundancies.
That being said, keep an eye on employee retention. There’s an ongoing labor shortage in a number of industries, so replacing employees isn’t something you want to be doing often. It’s expensive and finding the right replacements isn’t easy.
Develop a Business Interruption Strategy
The pandemic period taught many entrepreneurs a harsh lesson: always have a business interruption plan.
If a new pandemic strikes today, will your business be in a better position to respond to it?
Identify all potential events that could interrupt your business and develop a response plan for each event. You also need to invest in business interruption insurance.
Any disruptive event can lead to a big loss in revenue. This insurance policy covers your losses, thus providing a source of income that can help you keep your lights on.
Don’t Ignore Cybersecurity
Online hackers are not slowing down. Nor are they relenting in their attacks on small businesses like yours.
Most small businesses don’t invest in robust cyber defense systems, making them a prime target for hackers.
The average cost of a data breach is about $4 million. Just think about it. Can your small business survive? After an attack, most small businesses close shop within six months.
It’s understandable that you might not have the budget to build a full-scale in-house IT security department. You don’t have. Many managed IT companies offer affordable cybersecurity services that could suit your business.
Get Professional Help
Running a small business is no easy feat. You’re wearing multiple hats and running into new challenges every other day. Throw in the economic realities of 2023 and you can see how everything can go south if you don’t have steady hands.
Don’t shy away from getting professional help. There are small business consultants who can offer valuable advice on various aspects of your business. If you need help with marketing, for example, Patch Baker Functional Entrepreneur is just an email away.
2023 Can Be Your Year of Business Success
It might not be the best of years for business owners, but if we are being honest, every year is a grind. In spite of a falling economy, it’s possible to achieve business success. Implement the right strategies, be pragmatic, and know when to call out for help.