Small businesses have many challenges to overcome in 2022, but they can still work toward success and grow using the right strategies and talent.
Small businesses are the backbone of the economy. In fact, according to the Small Business Administration (SBA), they account for more than half of all private sector jobs in the United States. After weathering the storm of the pandemic, 2022 has had its ups and downs for these entrepreneurs, having to face several challenges that could impact their growth. So how do these small businesses achieve success, even in the face of these roadblocks?
Below, we’ll outline seven effective strategies for small business growth in 2022, even in the face of today’s challenges.
Today’s challenges and roadblocks to success
The business world is constantly changing, and the challenges for small businesses are always evolving. In 2022, the list is extensive:
- Labor shortages: 43% of small business owners say they were forced to temporarily close at some point during 2021 due to a shortage of workers. This ongoing issue worsens as the economy improves and businesses struggle to find employees. It is also leading to higher wages and more competition for talent.
- Inflation: Rising prices are a reality for businesses of all sizes, but they can be incredibly challenging for small businesses. Even a slight cost increase can significantly impact the bottom line when profit margins are tight. Inflation has made it difficult for small businesses to thrive, with products, including gas prices, reaching record highs.
- Supply chain issues: Supply chain management has become a major roadblock for small businesses this year. Lengthy disruptions are actively causing supply chain issues for small businesses. Covid, the war in Ukraine, hackers and cyberattacks, computer chip shortages — the list goes on and on. Furthermore, across the United States, businesses of all sizes felt the impact of supply chain disruptions as they were forced to halt production while waiting for goods.
- Declining economy: The economic outlook for 2022 — and beyond — is uncertain. Signs of an impending recession are starting to appear, which is concerning for small business owners: inflation rose 9.1% in June, gas prices are up 53% from summer 2021, and last month, the Fed hiked interest rates by 0.75 percentage points. The new State of Small Business report by Veem found that 49% of small business owners anticipate the US will face a recession by the end of this year.
While the situation is unarguably difficult, there are some steps that businesses should consider to strengthen their business in the present, as the aforementioned challenges may not be resolved in the short-term future.
Using technology to their advantage
Technology solutions are an effective way to overcome certain challenges faced by small businesses. Technology can help businesses with labor shortages by automating tasks, reducing dependency on manual labor, and increasing efficiency. However, with this increase in technology, cybersecurity is a must-have for small businesses. In the face of rising cyber threats, it will help keep them protected from data breaches, cyberattacks, and other online threats.
Investing in their employees
In the midst of the uncertainties ahead of 2022, employees remain the most valuable asset for businesses. Investing in their development and well-being is an effective strategy for small business growth in 2022. It will help with labor shortages by retaining existing employees, boosting morale, and attracting new top talents. It will also lead to increased productivity and creativity, which will in turn help small businesses overcome the challenges of a declining economy.
Diversifying their products and services
To effectively mitigate the risks of declining demand for their primary offerings, businesses can diversify their products and services. This will also help them better meet the needs of their customers and take advantage of new market opportunities.
Additionally, they should consider expanding into new markets or offering new services that complement their existing offerings. For example, a business that sells physical products can diversify by adding digital products or services. Or a service-based business can add new service offerings or productize their services. By diversifying their products and services, they will reduce their reliance on any one particular offering and better insulate their businesses from the effects of a possible recession.
Investing in digital marketing
Digital marketing is a crucial growth strategy for small businesses in overcoming business growth challenges. It has helped companies reach new customers, generate leads, and boost sales. It is also an effective way to build brand awareness and a robust online presence.
Some digital marketing strategies for small businesses include:
- Developing a solid social media presence
- Investing in search engine optimization (SEO) to improve their websites
- Creating engaging content
- Running targeted ad campaigns
Focusing on the customer experience
Bolstering the customer experience (CX) and customer satisfaction can help businesses stay successful, even in trying times. A study done by Gartner found that nearly half of organizations claimed they can track the financial benefits of CX projects and over 80% of organizations expect to compete mainly based on CX.
Furthermore, research by American Express found that 86% of customers are willing to pay more for a better experience. Simply put, a positive customer experience promotes loyalty, helps retain customers, and encourages brand advocacy.
Forming strategic marketing partnerships
A strategic marketing partnership involves two or more businesses joining forces to market their products or services. A good example is a small business teaming up with a larger company to reach a wider audience.
Strategic marketing partnerships have many benefits, especially for small businesses. These partnerships will help small businesses overcome some common business growth challenges, such as:
- Lack of resources: When a small business partners with another business, they can pool their resources and gain access to things they couldn’t afford on their own. For example, they might be able to afford to run a joint marketing campaign or host a big event.
- Lack of reach: Small businesses often have a limited reach compared to larger firms. But when they form a partnership, they can tap into their partner’s customer base and expand their reach significantly.
- Lack of expertise: If they’re lacking in certain areas, such as marketing or social media, partnering with a business that excels in those areas can help them fill in the gaps and grow their business more effectively.
Revamping their business plan
A business plan is a document that outlines the company’s goals, strategies, and how they plan to achieve them. It’s an essential tool for any business, particularly for small businesses. In reviewing their business plan, business owners should also consider their operating model, and how they can make it more efficient and adaptive to the emerging economic challenges.
Small businesses have a lot of challenges to overcome in 2022, but they can still thrive and grow this year with the right strategies and talent.
While small businesses are focusing on achieving success, we can help keep them protected with cybersecurity solutions that are powerful, easy-to-use, and affordable — taking one more thing to worry about off their plates.
Connect with Avast Business today to secure and enhance small business growth.