Running a small business is a challenge, and 2023 looks to be yet another uncertain year for small businesses. However, you can prepare for the challenges for the upcoming year by being ready and prepared for them. Having a solid contingency plan and being able to implement it ensures business continuity for your company. Without one, businesses cannot survive in today’s uncertain landscape.
If global inflation and supply chain issues continue into 2023, there will be risks in this coming year that will require some preparation from small businesses. Rising costs will mean more money spent for raw materials and components. Shortages will cause delays. Geopolitical situations will put a strain on supply chains globally. Each of these factors will test small businesses.
1. Financial Management
Financial risks will be plentiful in 2023, unfortunately. Managing finances of a small business will be difficult this coming year with higher costs for just about everything. The Federal Reserve has made it clear that interest rates will remain high which makes the cost of borrowing more difficult for small businesses. Some economists point to a slowing of the economy as a recession, which means that consumers will be less reluctant to spend and more savvy about what they buy.
What Your Small Business Can Do: Sound financial decisions are important, especially in a period of inflation and higher interest rates. There are many automation programs that can help small businesses manage their books and keep an eye on profit margins and cash flow.
2. Increasing Your Customer Base
Customer service is a challenge for all small businesses all the time as no company can survive in today’s market without strong customer service skills, no matter what the industry. Small businesses must always find new customers while being mindful of customer acquisition costs. However, lead generation can be enhanced by improving the company’s website and social media channels.
What Your Small Business Can Do: There are more ways than ever to find new customers even on a limited budget. Social media digital marketing is a great way to reach your target customer base without blowing the budget.
3. Cyber Security Threats
As small businesses continue to digitize their assets, the convergence of information technology and operational technology systems is becoming increasingly common. However, security vulnerabilities will lead to an increase in cyberattacks. These disruptions can be extremely costly, especially for a small business.
There will also be a rise in cyberattacks through AI (artificial intelligence) with more automation of the attacks such as finding vulnerabilities and evading detection. AI malware will evolve in response to security measures, making it harder to protect a business.
What Your Small Business Can Do: The best protection against cyber security threats starts with education about how to prevent them. Make sure your employees are up to speed on how important it is to protect your business. Small business insurance can also help to protect against these threats.
4. Having the Proper Insurance
With all of the risks a small business faces in 2023, it is critical to have the proper coverage beyond cyber insurance. Events like a natural disaster, vandalism or theft can affect any small business. If your business is not insured against these occurrences, it could be destroyed with no finances to replace or repair what was damaged. Property insurance will cover events such as natural disaster, vandalism, fire, or theft.
What Your Small Business Can Do: In addition to cyber insurance and property insurance, many businesses also carry workers’ compensation insurance, general liability and professional insurance. Talk to an insurance companythat understands small business insurance. Many small businesses require a tailored approach to meet their coverage needs.
5. Supply Chain Disruption
Supply chain disruption has been increasing since 2020 and is not expected to improve much this year. Global supply chains are more vulnerable to problems outside a company’s control, for example an earthquake that shuts down a factory. Shortages in certain items remains and overall stress on supply chains is at an all-time high. Because shortages and delays can really harm a small business, rethinking the supply chain is necessary.
What a Small Business Can Do: Small businesses must diversify their supply chain and look to alternatives for suppliers who cannot meet their demands. Suppliers and production facilities that are closer to home or spread out geographically is one way to be able to manage disruptions.
Sustainability is being mentioned everywhere, including for small businesses. The issue of sustainability is two-fold. An increase in adverse weather conditions will mean that businesses must update their disaster recovery response. These conditions will disrupt supply chains and daily operations. Weather-related connectivity issues will be a large concern for businesses.
At the same time, consumers are looking to businesses to help counteract climate change. Consumers are willing to be loyal to companies that are mindful of climate change and the earth’s wellbeing.
What a Small Business Can Do: When possible, make changes in your processes that support green initiatives. Your customers want to know that you are committed to sustainability.
Small Business Insurance to Cover Every Day Risks
This year could present small businesses with issues that need to be handled the right way. With so many risks to small businesses, it is easy to feel overwhelmed with the challenges this year might bring. However, Coverdash can mitigate these risks with insurance to fit your businesses’ needs. From general liability to cyber coverage, we give you the insurance you need to handle any issues that come your way.