Businesses were hit hard by the COVID-19 pandemic, and unfortunately, the years following have continued to strain owners, employees and even the consumer. While the particular challenges of the pandemic have passed, they’ve been replaced by equally worrying concerns such as inflation, recession, staffing issues, and consumer demands.
For some, the struggle continues
Our 2023 Economic Survey of Local Businesses revealed that while larger companies continue to fare better, smaller businesses – especially microbusinesses – are struggling. And while 65% of businesses saw sales increase last year compared to 2021, only 30% of companies find themselves ahead of where they were pre-pandemic. Optimism declined as well. In 2022, 42% of the businesses we surveyed felt optimistic about their prospects; only 14% reported feeling that way this year.
Along with the decline in optimism, companies overall faced 2023 with apprehension. Their outlook has been clouded by the weakening economy, inflation, and a challenging labor market – the same top three concerns as expressed in 2022.
While Ohio overall has restored the number of jobs lost to COVID-19, that recovery was confined to just a few metro areas, while most of the state continues to face shortfalls(1). As of August 2023, 123,674 businesses had been created in Ohio(2). There’s a boom of new corporations drawn to Ohio, lured by the state’s tax incentives, workforce, and low cost of living. It is anticipated that the surge of corporations setting up shop in Ohio are drawn to the availability of talent, and that this influx of businesses is setting the stage for the hire of new grads or out-of-state workers to fill all of these positions.(3) This tight labor market means stress for many Ohio workers – they aren’t getting paid livable wages and understaffing is adding more work and stress for those on the job.(4)
You’re stressed. What can you do about it?
Attract Talent
We covered the challenge of attracting talent in a previous article. Unfortunately, however, it remains an issue for many businesses to find qualified candidates to fill their open positions. One tactic is for organizations to seek qualified candidates from within. The “quiet hiring” trend encourages utilizing internal talent by dispatching employees to the areas in the company where they are most needed. Of course, this is not to say businesses should merely add on to an employee’s existing set of responsibilities. Employers must compensate workers for these evolving roles.(5) Employers may also need to think outside the box when they are hiring, focusing less on previous positions and education path, and more on a candidate’s ability to do the job.(6)
Face Inflation Head-on
As our survey indicated, most companies believe they have taken all the major cost-cutting steps they can and have fewer options left to explore. However, in the face of inflation, there is still a need to minimize the impact of rising costs. Closely monitor expenses to determine if there are any areas where costs can be cut. Motivate customers and vendors to pay their invoices faster to be sure you have ample cash reserves.[7] Most importantly, stay alert and informed and ready to adjust to the changing conditions.
Acquire New Customers with Existing Customers
During times of inflation, the customer acquisition funnel may tend to dry up. Businesses have smaller budgets with which to promote their products and services, and often face greater competition. Turn to your existing customers. First, find ways to reward their longevity and make sure they know you are grateful for their business. Satisfied customers can serve as your greatest brand ambassadors. Consider leveraging your existing users to drive new business: encourage reviews, implement a referral program, and utilize user-generated content (UGC) in your marketing efforts.
Monitor Trends
Customer behaviors are ever-changing. It’s important to stay ahead of the changes. Consider using analytics, if you have a website and use social media. Learn what your customers are viewing and what their needs might be. Or use market research to identify trends in customer needs, so that you can adapt products and services to meet those needs. Even just talking regularly to groups of customers will give you valuable insight into their challenges and offer insight into how you might adapt your business to be more valuable to them.
While stress continues to plague businesses in the wake of the pandemic, there are still a few stones that may be worth overturning to alleviate some of the pressure. Attracting and retaining talent by hiring from within, continually monitoring costs, encouraging customers to pay quickly, and remaining nimble are a few strategies to explore. In addition, using your existing customers as brand ambassadors to drive new business can help save money on new customer acquisition. Finally, consider using data to enable your business to pivot and adapt to customer needs.
Despite the bleak outlook for the upcoming year, there are still a variety of strategies businesses can leverage to help move things in a more positive direction.
FOOTNOTES:
1 – https://www.policymattersohio.org/research-policy/fair-economy/work-wages/state-of-working-ohio/state-of-working-ohio-2023
2- https://www.ohiosos.gov/media-center/press-releases/2023/2023-08-18/
3 – https://spectrumnews1.com/oh/columbus/politics/2023/08/02/ohio-s-workforce-boom-fuels-economic-expansion
4- https://www.policymattersohio.org/research-policy/fair-economy/work-wages/state-of-working-ohio/state-of-working-ohio-2023
5, 6 – https://hbr.org/2023/01/9-trends-that-will-shape-work-in-2023-and-beyond
7- https://www.smdailyjournal.com/sponsored/6-ways-your-business-can-fight-inflation-in-2023/article_d22d4176-7b06-11ed-a7dc-c7f83f39494c.html
