The huuman layer: 12 Predictions for Small Business in 2023 đź
The huuman layer: 12 Predictions for Small Business in 2023 đź
In our final market report of the year, we're going to mix it up and make some predictions about the state of Small Business in Canada in 2023.
Hello again!
If you normally receive our weekly huumans market insight report - this is our new look for the new year - something weâre calling âThe huuman layerâ. Weâve made the change so we can expand our insights and small business owner support in the coming year - so in 2023 expect better analysis, better insights and more useable resources in your inbox each week.
If youâve stumbled across us or if this was forwarded to you - why not start your new fiscal year with a free weekly dose of useful small business insights in your inbox?
This week weâre doing something a little different from the usual small business and market insight and analysis. The markets have started to slow down for the holidays and everyone is starting to think about taking some time off and consuming unwise levels of food and drink. So with that in mind, we decided to ask our huumans experts what they felt might be in the future for Small Business owners in 2023.
đź Small Business will benefit from Big Business failures
With the economy cooling off the back of reduced consumer spending triggered by inflation and rate rises, bigger businesses (being less agile) are looking to cut costs, and in the new year this is going to mean cutting staff. Weâre cheating a bit here, because this is already happening (as weâve reported), but we see this as a trend thatâs going to continue into 2023 and accelerate. The oil tankers are definitely trying to turn course, and thereâs little doubt itâs going to get messy. This could be a boon for Small Business hiring as previously tenured employees in big businesses begin to rethink their careers post-redundancy and look to join smaller, more agile, (dare we say more exciting?) businesses - where their experience will be better used and appreciated. If youâre struggling to hire talent into your business right now, 2023 could be your year.
đź New year, new business models
Small Businesses have always had the advantage of being more agile and better at adapting to the micro-changes in local markets. After all, they tend to be closer to their customers and communities. As the move to online-only, post-pandemic sales has started to see âmixed resultsâ, we predict small business owners using their unique entrepreneurial skills to find niches and opportunities that blend online, physical (and more novel) approaches to growing their businesses that until now would have seemed unusual or maybe bizarre. The rule book got a bit ripped up in 2022 and the traditional model approaches saw some unexpected failures - so 2023 might be the year for experimental ideas, different takes, new thinking and new normals.
đź Inflation will fall, but the market will be slow to heal
We think we've seen the last Bank Of Canada rate rise, we think inflation is definitely over the peak, and while interest rates are always slow to react - we think your variable rate mortgage is about to get cheaper. So all good. Whatâs not so good is we think itâs going to take some time for customer confidence to come back. Itâs going to mean lower spending (something weâve already reported on this year), and this lower spending is going to persist well into Q3. Will we see a rebound in Q4 for the holidays? We think itâll definitely be better for business that it was this year, but if we were to model our sales into the coming year, weâd be playing it safe while trying to diversify our market approach a bit. Now might be a good time to try new ways to stimulate revenue to fill the gap.
đź If youâre not online now, you will be
If your business is not online-savvy it will have to be this coming year. That might mean how your customers contact you. That might mean that youâre moving your invoicing to a digital, automated solution. That might mean youâre linking your bank feed to your accounts to get better insights. That might mean moving your books and operations into the cloud to understand your business better (yes, thatâs our thing, but regardless of if you choose huumans to do this, itâs something you probably will need to consider this coming year). If you donât have a good online or social presence, this is the year. In 2023, online Small Business tools are going to be more mainstream, more affordable and more unavoidable - and increasingly essential. With margins getting tighter and accessing new customers increasingly requiring real-time data, we see this coming year as being the year when Small Business makes the leap and fully embraces all that online has to offer.
đź Weâll all be automating what we can
Automation has been around for a long time. Most Small Business owners automate their invoices, for example, or have reoccurring payments coming from their bank account. But this year we predict Small Business will start to automate things they never previously thought possible. With the rise of amazing new platforms like DALL-E (which automates image creation through text inputs) and ChatGTP (which automates accurate content based on queries), Small Business Owners are going to have more access to automated marketing and knowledge resources. Theyâll start to use existing platforms like Zapier to link their operations to increase efficiencies. Automations are become less and less the domain of tech businesses and those with âtech knowledgeâ and this year we think weâll see more Small Business owners investigating and adopting automations to improve their bottom line.
đź Advertising is dead as we know it
Up until now, if you wanted to advertise your business beyond just your local market, youâd probably pay Google, Meta (Facebook, Instagram) or Twitter to do it for you. We predict Twitter will see a divorce from small business (and big business) advertisers in 2023. For many businesses the shock-jock approach of Twitterâs new owner and itâs general instability will just become too risky. As search generally looses itâs shine and keyword costs rise, Google will stop becoming as attractive when choosing to spend money on customer acquisition. Instagram? Well Instagram is in a transition, working out if itâs for the kids or for the advertisers - and many small brands (and individuals) have seen their feed exposure hit by algorithm changes. Facebook for some businesses will still remain a go-to, but for others (maybe the majority), it just wonât bring in the leads they need as Facebookâs user base flatlines across North America. We think 2023 will be the year that the traditional âbundledâ big-tech products will start to loose their grasp on Small Businesses advertising, and weâll see the development of new platforms and new creative ways to reach and talk to customers. Who will be building those new products and environments? We donât know, and some of those we see appearing wonât be around by the end of the next year. But something has to change, and 2023 is the year the change will begin.
đź Data security will become a big Small Business problem
Data breaches are now big news when they happen, and customers are becoming increasingly aware of their data - and increasingly worried about how that data is used, stored and handled. In 2023 weâll see new standards in data handling, and weâll see businesses rushing to advertise their data security and internally figuring out what data security is, and what it needs to be. We see this riding a wave ahead of government intervention, with businesses realizing that their brand reputation and their brand story is increasingly at risk from data security and privacy concerns, and them making big steps towards making customer data and privacy a core part of their business (and marketing) operations. For Small Business this is usually an easier (and cheaper) adoption compared to bigger businesses, and weâll see them pushing their privacy and data security as a competitive advantage.
đź People will be more important than profits
The market will be slow to recover, big business will continue to shed jobs, customers will continue be cautious and Small Business, which broadly had been struggling to figure out employees in 2022, will begin to focus in 2023 on solving how to keep the employees theyâve gained or retained. While wage rises patching the inflation gap might not be on the cards for everyone, Small Business will begin a focus on training, benefits, development, coaching - and generally finding a new approach towards their employees. Weâll see less top-down management structures. Less mandated schedules and 9-5. More peer-to-peer management styles. Better paid time off and reinforced parental leave options. Support and recognition for mental health, neurodiversity and diversity as a whole. Weâll also see Small Business openly embracing and figuring out sustainable hybrid and / or remote working as a means to stay competitive - in both the hiring and thriving space.
đź Crypto will fade away
Crypto was the future of payments - hell, it was the future of everything at one point. Now not so much. 2023 will see Crypto return to the world of die-hards, bullish investors and technologists - as the fall out from the criminal collapse of FTX reduces any lingering trust Crypto had left. Really the problem with Crypto is - it was a great idea, but after years of the worlds smartest minds working on it, it ultimately failed to gain everyday meaning for normal people. And thatâs primarily because it failed to be accessible (no-one worked out how to set up or manage a crypto-wallet), secure (that crypto-wallet would get stolenâŠa lot) or reliable (youâd have no idea how much would be in that crypto-wallet when you opened it - and the reason you lost the majority of your money would be near-impossible to understand). Then thereâs NFTs - an entire deeply complex technical (and culturally powerful) concept reduced to pictures of badly drawn monkeys in hats that Justin Bieber bought for $1M which immediately lost value. It was market speculation in the worst form. Will Crypto return as the future? Perhaps, but in 2023 Crypto, NFTs - the whole thing - will return to the tech-cave from which it came to plot itâs next moves.
đź Small Business funding will continue to struggle
We wish this wasnât the case, but Provincially, Federally and even at the level of Business Development Bank Canada (BDC) - weâre going to see little to no real progress in funding Small Business or supporting owners. Still lagging from the back-end of the pandemic, mired by obvious staffing shortages and inevitable opportunistic provincial politicking - if youâre a Small Business in 2023, any funding process is unlikely to improve and could very well deteriorate. Weâre still(!) in that âblame-it-on-the-pandemicâ phase apparently, and the traditional banks are showing little interest in improving the situation given that lending money isnât what it was. Is there a glimmer of hope? Will âSmall Business Weekâ cause a groundswell of heartfelt action? Will industry bodies do more than just put out negative press releases and endlessly whinge? Weâre saying no.
đź The news will continue to be in a doom-cycle
Small Business is struggling. Owners are fed up. Businesses canât cover their leases. The news this year has been full of negativity, and we just donât see this changing as it serves too many interests beyond the business owners themselves. Negative stories are easy to tell, and negativity is great fuel for political and financial power plays. In the real world of course, Small Business owners are getting on with it. Theyâre powering the national GDP. Theyâre taking risks. Theyâre âdoingâ. So we expect more negativity smothering the positivity in 2023, despite so many things to celebrate. Be mentally prepared for it and ignore all those knee-jerk stories of doom - itâll do you good.
đź Talk of recession wonât go away, but itâll be impossible to prove
Speaking of doom-cycles, recession talk is not going away, and in 2023 it will persist - but there will be no real conclusions. A lack of conclusions is going to split Small Business strategy. Some Small Business owners will turn bullish and start spending. Others will go bearish and start holding cash. We predict that those who are more cautious will see the biggest returns in 2023, but not cautious at the expense of growing their business. We see a stop/start economic outlook while the talk of recession echoes around the market, and with no definitive proof of recession, a constant swing between âspend nowâ and âsave nowâ opinions quarter to quarter. We think that those that recognize this back and forth rhetoric for what it is - people not knowing what theyâre talking about - will find a cautious balance for their business and surprise themselves by end of year.
And thatâs it for 2022! We hope you have a great holiday period, and weâll be back in January with more insights.
If youâre a huumans customer, note that our unlimited business support will be available as usual over the holidays, but that - as ever - we respond before the next business day. So do mark the public holidays in your diary.