Opinion: Three trends local small businesses should watch
By Kristi Alameda
New Bank of America research shows small business owners remain confident, with 76% feeling well-positioned for a strong year ahead and nearly half of small business owners looking to expand their business. This holds true for the tri-counties also, as Bank of America small business client lending is up year-over-year, reflecting this nationwide confidence and growth among the region’s small businesses.
As we head into the second half of the year, tri-county small business owners in the healthcare, technology and professional services industries are also looking at more ways to access working capital, including SBA loans. The recent expansion of the SBA loan program will no doubt help these small business owners as they look at tenant improvements, buying equipment and investing more in their business overall.
So, what do business owners need to keep in mind for the remainder of 2023? Here are three of the most significant insights, trends, and obstacles businesses should be prepared to face this year from the recent Bank of America Small Business Owner Report.
Labor Concerns and Challenges
Fifty-two percent of business owners say labor shortages are impacting their business, and as a result, many entrepreneurs are working more hours, experiencing issues filling job openings and modifying their hours of operation. Twenty-one percent of business owners also reported customer losses due to labor issues.
To combat these challenges, business owners are adopting new strategies to retain and attract talent. Over the past 12 months, 51% of business owners implemented additional perks and benefits, including higher base pay for new employees, allowing remote or hybrid work, introducing new employee training options and providing additional healthcare benefits.
Entrepreneurs who have already implemented those changes are seeing their efforts pay dividends—75% of business owners reported that providing additional benefits to retain talent over the last 12 months had a meaningful impact on employee morale and retention.
Entrepreneurs will need to be creative to grow their businesses over the coming year and tapping into the latest digital tools and resources can help.
Eighty percent of business owners digitally optimized their businesses last year by adopting new tools and technologies, and 49% of business owners plan to incorporate automation and artificial intelligence (AI) tools in 2023. Overall, 90% of small business owners say digital tools helped make their business operations more efficient.
Most business owners are using new technology to accept more forms of cashless payments and streamline payroll and bookkeeping, but digital tools can also help facilitate marketing — nearly half of business owners primarily employ an online or digital-first marketing strategy. Entrepreneurs are also using digital tools to help them stay organized, reach new customers, and implement sustainable business tactics.
The last three years have forced business owners to adopt a nimble mindset as they try to stay a step ahead. Entrepreneurs who are looking to expand their business operations over the course of 2023 should consider implementing the following principles of an adaptable business model:
- Be Flexible: Today’s business owners are equally creative, optimistic, practical, and aggressive about the business goals they set and where their business is headed. Business owners should review their plans and remain open to reshaping their direction as the year unfolds.
- Be Measurable: By setting specific and measurable goals, business owners will be able to determine the effectiveness of their strategies and identify areas where their plans can improve. Setting objectives can help business owners measure the current and future success of their business model.
- Be Open to Learning: Business owners who commit to learning new skills will be able to better adapt to new challenges. By connecting with fellow entrepreneurs and partners, entrepreneurs can gain valuable mentorship and knowledge on how to grow and better their businesses.
Whether a small business has been around for decades or is just opening its doors, Bank of America is committed to providing the resources necessary to Central Coast businesses to help them operate and grow their business at every stage.
Kristi Alameda is the Senior Vice President, Small Business Banking Manager at Bank of America.