Share this @internewscast.com
Opinions expressed by Entrepreneur contributors are their own.
Unless you’ve been hiding under a rock, you’ve probably read the dreary forecasts from JPMorgan, Citi and Goldman Sachs, which all agree that 2023 will be a rough year for the economy, perhaps even kicking off a “mild recession.”
But try as they might with their recession talk on the heels of a global pandemic, supply chain chaos and market upheaval, we resilient entrepreneurs aren’t ready to throw in the towel quite yet.
Small business owners’ most significant advantage is our ability to stay nimble and pivot toward opportunity. I say this as someone who built and exited a company after the last recession — when many founders rode a wave of “creative destruction” where smaller competitors thrived as big firms faltered. The little people, not the corporate behemoths, were best positioned to pick up the pieces and innovate.
To see how others feel about this moment, Hello Alice surveyed 2,635 small business owners to gauge their sentiment heading into the new year. The findings, published in partnership with Mastercard, show that while nearly two-thirds of entrepreneurs are worried about a potential recession, an astounding 73% predict their businesses will grow this year.
If that sounds counterintuitive, I agree. But a closer look at the results illustrates how scrappy entrepreneurs can be in the face of adversity. Rather than wait and see what happens, owners are already crafting action plans and seeking solutions to prepare them for the challenges ahead.
Based on our survey results, here are three strategies for small business owners hoping to beat the 2023 trendlines.
Related: 7 Recession-Proof Industries to Protect Your Money
1) Make sure you have access to working capital now
In uncertain times, small business owners need additional funding, particularly those mainly relying on bootstrapping.
Why? Here are a few findings to set the scene:
- 66% of owners said their expenses increased in 2022
- 70% said their revenue stalled or decreased in 2022
- 70% plan to apply for funding in 2023
So far, entrepreneurs have successfully combatted inflation with price increases and adjustments to product offerings. Nearly two-thirds of owners said their business ended 2022 in a financial position as good or better than the year before. But the convergence of expenses and revenue tells a story of shrinking margins squeezed by inflated costs. You can’t raise prices forever, and events like a recession are certain to upend sales forecasts.
Consider the following options to ensure you have ample working capital to overcome any financial surprises:
- Develop a relationship with your bank. Lay the groundwork now, and you’ll have a friendly face to help you navigate available resources and facilitate potential financing applications.
- Seek out a business credit card. Credit cards help you cover unexpected expenses and pursue new opportunities, often while earning valuable rewards that you can reinvest in your business.
- Visit the Small Business Funding Center. This free resource matches you with relevant grants, loans, and credit opportunities.
Related: How to Know If You Need Funding (and How to Get It)
2) Get scrappy with tech solutions
In our outlook survey, businesses ranked marketing among their top concerns. Owners are worried that price increases will reduce their overall customers, and the end of budget-friendly digital marketing makes customer acquisition more difficult (and expensive) than ever.
Thankfully, a growing range of tech solutions can help owners optimize their marketing efforts while fitting into any budget. Here are a few ideas to get started:
- Adopt software tools. Platforms like Constant Contact, Hubspot Marketing Hub and Sprout Social help you target your audience and amplify your reach.
- Explore freelance help. Resources like Fiverr, Upwork, and MarketerHire can match you with affordable digital marketing support to take the work off your plate.
- Look for discounts. Take advantage of introductory offers and seasonal discounts to test-drive tools before making a long-term commitment. Not sure where to look? The Hello Alice Business Solutions Center is one free resource that curates deals on popular software solutions to help owners shop and save.
3) Be ready to fail fast and fail often
Finally, in a reassuring sign that owners feel confident, a majority of small businesses plan to hire this year. According to our survey, twice as many business owners plan to hire in 2023 (52%) as were actively hiring in 2022 (26%). Growing headcounts are a proxy for growing businesses, but there’s still an inherent danger to making big changes, especially during uncertain times.
Instead, operate with a startup mentality that sets up low-stakes experiments to explore an idea’s potential. Rather than dump your marketing budget into TikTok, test the waters with different types of content. Before bringing someone on full-time, trial them on a part-time or project basis. Set goals, measure outcomes, and assess where to go from there.
Some of your 2023 experiments are sure to fail, but this innovative mindset helps you conserve valuable resources to invest in long-term growth in the years to come. And remember, the economy may flounder for a bit, but as entrepreneurs, times of uncertainty are when we thrive.
Related: By Failing to Prepare, You Are Indeed Preparing to Fail