Courtesy / Bank of America
Todd Peacock, Bank of America
Updated: June 5, 2024
How to navigate today's uncertain business environment
By Todd Peacock, Bank of America
Maine businesses entered the year on a high note. The state’s economic output grew faster than the rest of New England at the end of 2023, according to the federal Bureau of Economic Analysis.
As the second half of 2024 approaches, new Bank of America research shows business owners nationally remain confident despite lingering uncertainties.
According to the study, business owners anticipate revenue growth and feel confident in the overall economy. Entrepreneurs’ concerns around several key economic factors remain elevated nationwide but are down from last year.
While concerns around supply chain issues and a recession are down significantly, concerns around inflation and interest rates only slightly dropped, as the Federal Reserve holds interest rates at a 23-year high until inflation becomes more manageable.
The political environment and health care costs are top of mind for small business owners, both seeing increases since 2023. Despite these concerns, the majority (65%) expect their revenue to increase in the next 12 months.
So, how can business owners meet their revenue expectations as we head into the second half of 2024? Here are three strategies small business owners should consider implementing to ensure success and growth this year:
Conduct a SWOT analysis
It’s always smart to conduct routine evaluations of your business, but especially ahead of any upcoming shifts in the economy or impacts from the political environment. Consider finding time to analyze your business’ strengths, weaknesses, opportunities and threats.
A SWOT analysis not only helps evaluate the state of your business but will help identify what changes and trade-offs are needed to ensure success. In fact, 70% of small business owners say they have made trade-offs to maintain profitability, including personal sacrifices, such as working more hours or reducing their own salary, and operational changes, such as increasing prices or reducing marketing costs.
Before implementing any similar adjustments, make sure your decisions are informed by your SWOT analysis results so you can continue to strengthen and build your business.
Monitor your cash flow
By tracking current and anticipated revenue and comparing it with your business' expenses, you can anticipate when to adjust your business model to avoid unnecessary costs. Digital tools can be helpful to future-proof your business.
According to our research, 71% of small business owners have digitally optimized their business and operations in the past 12 months, and over half of those small business owners are using mobile apps or business banking online.
These digital tools enable easier financial tracking, as business owners have more flexibility to access their finances wherever they are, whenever. When faced with economic uncertainty, this can be particularly useful, allowing for faster and more informed decision-making around cash flow management.
Reconnect with customers
While the year may feel tumultuous for your business, remember that a worrisome economy impacts your customers as well. Take time to connect with your customers and build brand recognition so they continue to show loyalty even when times are tough.
Studies show that 82% of small business owners have implemented tactics to engage with their clientele, whether that’s personalizing interactions with customers, taking steps to implement customer feedback or hosting community events. Consider if any of these options are viable to help your business stand out in your community.
You can also look to social media platforms to help humanize your business. A significant 65% of small business owners use social media to interact with customers and promote their business through responding to comments, posting about themselves and their employees and promoting upcoming sales.
Whether your small business has been around for decades or is just opening, there are always steps to take to strengthen your business, especially in an uncertain economy.
Most Recent
Most Recent
0 Comments