Are you ready to take on new small business trends in 2022? Knowing what’s on the horizon can help you plan your business strategy now and stay ahead of the curve.
In this overview, you’ll learn about anticipated trends and challenges for 2022 and how your business can prepare for them. You’ll also find easy-to-implement suggestions to turn potential hurdles into opportunities by focusing on a few key areas of your business. With this strategy, your business will be better positioned for stability, growth, and success in 2022 and beyond.
Key small business trends and challenges from 2021 that will impact 2022
As 2021 comes to a close, there’s unpredictability in some key areas, including whether:
- New COVID-19 variants will continue to emerge and if so, their impact.
- Inflation will ease from the 5-6+% that it has hit in recent months.
- Supply-chain challenges and a tight labor market will continue to disadvantage small businesses.
Positive small business news for 2022
If there’s a silver lining to the challenges of the last 18 months, it’s that thousands of entrepreneurs have become even more creative and effective business owners. You’ve found new and innovative ways to pivot and meet customer needs despite unprecedented challenges. As we move forward, there are more reasons to be optimistic. Here are just a few:
- Many economists and analysts predict continued economic strength overall. Although the pace likely won’t be as fast as it has been in 2021, analysts predict an annualized rate of around 3.7% for 2022. Slower growth is still growth, and that’s good news for small businesses!
- The supply-chain challenges that put the brakes on full recovery for many small businesses in 2021 are showing some signs of easing. This is in part because of shifts in manufacturing and distribution. Many small businesses also aren’t as reliant on some of the items that have been particularly delayed (for example, the semiconductor shortage that impacted electronics, cars and some major equipment). Still, it may be a while before supply chain issues are fully untangled.
Small business trends for 2022
It’s never too soon (or too late) to plan, implement and pivot your business strategy. After all, the most successful businesses turn challenges into opportunities. Here’s how your business can navigate 2022 small business trends for a stronger start to the new year, and then leverage them into growth throughout this year and beyond.
1. Prepare your business for persistent inflation
Right now, there’s increased consumer demand and supplier shortages, as well as continued labor issues and ongoing uncertainty from the pandemic. As a result, the current inflationary challenges are unlike anything the U.S. has seen in decades. Many of your customers likely haven’t experienced prices that steadily rise in response to the economy. To ensure that your business is prepared for the likely cost increases to come, take these steps now:
Update your financial projections and budgets to ensure that you’ve accounted for this spike.
Just about every aspect of your business, from staff costs to supplies and everything in between, will likely cost more in 2022. Take time now to review all facets of your operations and make budget adjustments as needed. While high inflation is typically tough for businesses, it’s not impossible to overcome. When you’re prepared for it, you can find ways to build efficiencies and reduce costs to minimize the impact on your customers and team.
Ensure that you have more-than-enough working capital on hand.
Working capital – funds that help cover day-to-day and shorter-term operational expenses – is crucial in unpredictable times. Having enough on hand (often, more than you think you’ll need) will make it much easier for your business to adjust to higher costs for the foreseeable future. It will also help you leverage opportunities. For example, you can negotiate for bulk purchases for business supplies and inventory. This can help you absorb some of the increases, rather than immediately raising prices for your customers.
2. Be digital-forward
When the pandemic temporarily shut down face-to-face operations, businesses needed to act quickly to keep their ventures running. The businesses that already used digital options for purchases, deliveries and services were well-positioned to leverage opportunities for customer engagement. Those that found ways to pivot relatively quickly were also spared from significant loss. In fact, many of them found new ways to grow customers and revenue streams.
Now, digital interactions are part of the “new normal.” As you move forward, customers will continue to expect digital options, so ensure that your business is as digital-forward as possible:
Review your website
While social media is great for promotions and online events, your website is still the primary way that people engage with you for sales and service. Check for necessary updates to hours, online ordering and delivery (including return and exchange policies), promotions, accessibility, search engine optimization (SEO) and more. Review your Google My Business and search profiles to make sure that the information is updated and user-friendly. Research shows that customers are 50% more likely to buy from a business with a complete Google profile.
Optimize your sites for flexible online payments
Shoppers in the U.S. spent over $70 billion in click-and-collect purchases in 2020, and this volume is expected to grow annually around 18% growth through 2024. If it’s relevant and useful for your customers and your business, consider implementing a “buy now, pay later” app for e-commerce. A payment option like this can be the deciding factor for customers who are feeling inflation’s pinch. It can also make higher-cost products and service more accessible to your customers. This type of plan is increasingly popular – already, analysts noted a 400% surge in “buy now, pay later” on Black Friday in 2021.
Continue to hone contactless and online business transactions
Look at all your points of contact, for both customers and vendors, and see how you can make transactions easier and safer for them. This may mean making upgrades to your existing technology or purchasing new equipment and software. Whatever the case is for your business, this is a trend that’s not likely to revert. Consider it money well spent on your customers and your long-term success.
Invest in your business now to reap rewards in 2022 and beyond
Knowing what’s ahead for 2022 can help you make the most of the upcoming small business trends. As you make your plans for 2022, keep these small business trends and challenges in mind. Taking the time now to prepare ensures that your business will have a strong start to the new year.