Definitive Small Business Guide For 2024
In light of the evolving landscape, ROK Financial embarked on a comprehensive survey involving small business owners across a range of sectors to delve into their economic and business outlook for 2024. More than just a data-gathering exercise, this survey is a snapshot of the hopes, dreams, fears, and realities of entrepreneurs at the forefront of our economy.
The data we’ve gathered paints a vibrant picture of optimism tinged with cautious realism. Small business owners are embracing the digital revolution, adopting new technologies to streamline their operations, and to improve and widen customer engagement in their market reach. Yet, even as they capitalize on the advantages of digitization, it’s clear that there are other factors at work in the minds of small business owners.
Our survey also highlights the resilience of small businesses in the face of adversity. Despite economic uncertainties and market volatility, small business owners remain steadfast in their commitment to growth and innovation. Many are devising creative strategies to navigate through challenges, underscoring the inherent adaptability that is the hallmark of small businesses.
In terms of economic outlook, the feedback is a mix of confidence and concern. While some business owners anticipate a prosperous 2024, buoyed by favorable market conditions and strong business strategies, others express concern over the potential impact of inflation, supply chain disruptions, and policy changes.
Yet, the overarching sentiment that emerges from the survey is one of hope. Small business owners are not merely surviving, but thriving. Leveraging their unique strengths to carve a niche in their respective markets. Their stories are a testament to the indomitable spirit of entrepreneurship. Ones that celebrate the tenacity and determination that fuel the engine of our economy.
In the sections below, we will delve deeper into the key findings of our 2024 Small Business Outlook Survey. We will explore the specific challenges that small businesses face, the strategies they are employing to overcome these hurdles, and the trends shaping the future of small businesses. By shedding light on these critical areas, we aim to provide insights that can help small businesses thrive in 2024 and beyond.
So, whether you’re a small business owner seeking inspiration, a policymaker looking to understand the small business landscape, or just a curious reader, we invite you to join us on this journey of discovery. As we turn each page of our survey, you’ll see the face of 2024’s small business landscape come alive in the stories of determination, innovation, and resilience that underpin our economy.
Economic Outlook
Confidence in Financial Health for 2023
When we first started this survey, if we were going to gauge people’s ideas for 2024, we would have to gauge how people felt about 2023. We had to understand how they feel about their current financial standing while we were still in 2023. Which would serve as a general baseline to measure their aspirations for the upcoming business year. We also wanted to see if there was any correlation between the “current” situation and “expected” situation.
We wanted to make it as simple as it could possibly be so we could compare to data gathered from others. When we were collecting data for 2023 financial performance, we asked business owners to rate it based on a scale of 1–5.
We weren’t expecting the best possible outlook from small business owners. While the situation in 2023 could have been much worse, it was by no means a groundbreaking year for growth. We were expecting low to mid levels of financial standing with some strong performing outliers.
However, the results we gathered were actually better than even our best projections.
Among all the business owners who participated in the survey, an impressive 36.78% expressed the highest level of confidence, rating their businesses at 5. Highlighting the very high performance in their own ventures this year.
This high performance was even greater emphasized by an additional 27.59% of the respondents rated their confidence at 4, indicating a substantial level of positivity.
Out of all the applicants, only a small percentage of 6.90% rated their confidence at the lowest point 1. Showing some concerns do still exist. These findings shed light on the diverse perspectives and experiences within the business community. However, the data as a whole shows a clear and deeply positive trend of optimism for 2024 that we weren’t expecting among small business owners.
What is your expected annual revenue growth for your business in 2024?
Here, we wanted to explore projected economics in 2024 with more detail.
Specifically, we wanted to tangibly measure just how optimistic or pessimistic our applicants were in terms of revenue growth.
It was clear that, based on our previous survey questions, there was a surprising level of optimism for the coming year. However, there is a clear and objective limit to how much information you can get when you simply ask business owners to choose between optimistic, moderate, and pessimistic.
So for this section, we had them choose between 1 of 4 different ranges of potential growth:
- less than 5%
- 5–10%
- 10–20%
- More than 20%
Among all the business owners surveyed, a noteworthy 6.90% anticipate modest growth, answering less than 5%. On the other hand, 19.54% foresee a growth range of 5–10%, indicating a healthy level of optimism. Interestingly, a substantial portion of 34.48% predicts a more significant annual growth of 10–20%, suggesting a positive outlook for these businesses and potential opportunities for expansion. Furthermore, an impressive 39.08% express high expectations, projecting revenue growth exceeding 20%. This clearly reflects their confidence in the future success of their ventures and highlights their ambitious goals. These findings provide valuable insights into the diverse range of growth expectations within the business community and offer a glimpse into the anticipated financial landscape in 2024.
Anticipated Business and Financial Challenges
Primary Business Focus for the Upcoming Year
We anticipated that the majority of business owners would be prioritizing the need to stay up to date with the technological needs in their respective industries. After conducting their own research, certain members of our team were anticipating the rise in automation and AI to pressure the majority of business owners into placing technological innovation as a core goal for this year.
To our surprise though, only a minimal 11.49% express a specific focus on staying up to date with industry technology needs. This could suggest a number of possibilities. One is that some business owners may not fully recognize the potential benefits that technological advancements can bring to their operations. Another possibility is that the market impact for recent “groundbreaking” innovations has been overestimated for small businesses.
This theory does happen to correspond with how 39.08% said they prioritized “securing funds for expansion and innovation”. Underscoring a deep commitment to seeking growth opportunities and staying ahead of the competition. Perhaps not using the same “tech-oriented” avenues we originally projected. But it does still reflect a proactive approach in ensuring the sustainability and success of their business by exploring new channels.
However, the highest ranking answer for business owners, at 41.38%, was actually fostering business growth through marketing strategies. Which is quite interesting given that some of the most notable advancements in recent years like AI are finding new and incredible applications in the field of marketing. In fact, some of them were used for this survey.
Lastly, a negligible 8.05% of the respondents specify other considerations. Although the details of these considerations are not provided, it is possible that these business owners have unique priorities or specific challenges that require their attention.
Overall, this survey provides some interesting insight into where business owners are planning on placing their innovation. We can see a very clear emphasis on funding, marketing, and a lesser focus on generally “staying up to date” within their industry. Rather, small business owners are prioritizing specification applications where said technical innovation can be employed for their short and long-term interests.
What do you anticipate being a challenge for your business in 2024?
Naturally, we also wanted to gain a better sense of what challenges small business owners would face in 2024. Or, more to the point, what business owners perceived as their biggest challenges in 2024.
Narrowing down the number of potential concerns was a difficult task. It basically boiled down to blending a very large number of potential concerns into four primary concerns for 2024. Including “Maintaining Good Employees”, “Interest Rates / Inflation”, “Manage Cash Flow”, or “Other” for miscellaneous topics we didn’t cover.
Out of all the small business owners interviewed, we found that the single greatest concern, by a significant 47.13% majority, was the challenge of effectively “Manage Cash Flow”.
By comparison, the other responses were: 20.69% for “Interest rates / Inflation”, 13.97% for “Maintaining Good Employees”, and 18.39% “Other”. All of which elevate “Managing Cash Flow” as the prevailing challenge for 2024 for an overwhelming majority. At least according to this survey and its applicants.
This anxiety isn’t exactly unfounded. Economic uncertainties like rising interest rates and inflation are continuing to make every penny precious. Especially when we’re making a mental or physical plan for the upcoming year. When you’ve got a business to run, one of the most difficult questions is predicting your cash flow. Consequently, it also highlights the critical importance of financial stability and underscores the need for businesses to implement robust financial management practices in order to ensure their long-term success.
Anticipation of Economic Trends and Challenges Affecting the Industry in 2024
We also really wanted to measure optimism within specific industries, rather than the market as a whole.
There was in fact a concerning level of business owners, 29.89%, who declared themselves “Unsure” about the economic status of their respective niche. Not to mention 11.49% of them answering to both “Negative” and “No Significant Impact”. All of which does portray an element of concern and doubt.
However, a very strong majority of 47.13% displayed the same trend of optimism we’ve been seeing across this survey. Also, when we compare these results with others in the survey, we can see that this isn’t a “loose” or “vague” sense of optimism. It’s strong and tangible. When we compare these results gathered before, we can observe a general optimism across the market. When we measured expected annual revenue growth, we observed how business owners are projecting strong annual growth in the coming year.
Marketing and Branding Strategies
In what ways do you plan to adjust your budget and brand strategies to stay competitive in the upcoming year?
Out of all the unexpected and interesting results we got for this survey, this one may have been the most interesting. Not just because it surprised us again, but also because it was the most diverse in terms of answers.
One important note about this section is how we asked applicants to select all the answers that applied, rather than simply selecting a single answer. We knew we couldn’t possibly cover every potential challenge being faced across every industry. Especially since this is a survey about the general but holistic economic outlook for 2024. Not one particular industry. So there was always going to be some overlap. Not to mention how most companies employ a large number of strategies across their entire business cycle.
So we grouped and merged them into a few general options to select. The 5 potential answers were listed as: “Invest more budget into new and innovative technology”, “Hire additional staff / new talent to meet increased needs”, “Experiment with new marketing platforms to increase customer engagement”, “Purchase additional inventory to meet customer demands”, and “Other”.
First things first, out of all the 5 options, “Experiment with new marketing platforms to increase engagement” proved the most popular option at 52.87%. This doesn’t serve as a huge surprise given that new marketing techniques, particularly digital marketing are still continuing to grow in, not just influence but also in complexity and diversity. The survey reflects on how the current digital landscape is one that is constantly looking for new and innovative ways to reach people. However, it is possible that recent trends in advancements in AI, and how its reinvigorated digital marketing efforts across the board.
The idea that the impact of new technologies has led to small businesses placing more emphasis on marketing is ultimately just 1 theory among many. Still, we thought it was worth mentioning considering that the second most popular answer, at 40.23%, was “Invest more budget into new and innovative technology”. Quite a few members of the staff were expecting recent advancements in AI and 3D printing would put “Investment into New Technology” in the #1 ranking when it came to innovating new strategies for 2024. While it did prove a deep concern for many businesses, ranking #2, it still lost to “New Marketing Strategies” by a sizable 12.63% in the survey. This may serve to highlight how many analysts and business owners do have a historical tendency to overstate the impact of new technologies on the market. Especially compared to how many businesses would much rather invest in or upgrade existing systems and workflows than adopt new ones.
Additionally, 32.18% intend to hire “additional staff or new talent to meet increased needs”. While this isn’t a strong indicator of “a need to innovate” in and of itself, it does suggest that small business owners are expressing interest in bringing new staff on board to investigate new means to experiment or improve current systems and work flows with new methods.
However, that 35.63% that aim to purchase additional inventory to meet growing customer demands definitely highlights a need to maintain existing workflows rather than to innovate on them.
Lastly, 6.90% provide specific responses under “Other,” indicating diverse strategies tailored to their unique circumstances.
While these results are very diverse and give us a more detailed outlook, it ultimately serves to highlight a growing need for innovation. The data gathered in this survey does not suggest that investing in more technical solutions are being perceived as a universal solution to all problems. It’s very clear about that in fact. However, the combined information gathered here does portray a deep need to innovate to maintain a competitive edge. Especially when it comes to branding and budget. Across multiple channels perhaps, but ultimately, there’s a very strong and growing voice for innovation across the market.
Investment in New Marketing Channels or Strategies in 2024
Speaking of channels of innovation, here we wanted to bluntly ask business owners how they were going to be investing in their marketing channels. Generally, we wanted to see if they were gonna be looking to invest in current channels, continue using existing channels, or cut back all together in 2024.
The prevailing view was a very dominant 63.22% declaring that they would be “Exploring new Digital Marketing Strategies”. Which isn’t surprising considering that the field of digital marketing is a constantly evolving field that keeps developing alongside the digital space. Developing new and innovative ways to reach targeted audiences.
21.84% voted for “Continue with our Existing Marketing Approaches”. This is ultimately a small percentage compared to those willing to explore new channels. Still, it is a bigger number than we were expecting. In a landscape that is constantly developing new digital methods to reach audiences, it seems interesting that more than 20% of applicants would rather invest in their current methods than branch out into new ones.
It’s also surprising that 13.79% of applicants remain uncertain of where they want to go exactly. On the cusps of the new year, it does seem a tad indecisive to be uncertain about an established marketing strategy.
What’s not unsurprising is how only 1.15% of business owners say there is a “Cutting Down” on marketing expenses this year. The data gathered here paints a very clear picture of how marketing methods, both old and new, are a crucial priority for small business owners this year.
Planned Positioning of Business in Terms of Marketing Strategies for 2024
While the marketing data in the survey shows a sincere need to innovate with new digital strategies, it also shows how this need is complemented with a need to maintain existing methods. This is something that was clearly demonstrated in this section. Here we simply asked small business owners if they wanted to employ Traditional marketing methods, strictly digital methods, or integrate the two into a single strategy.
While digital dominance clearly prevailed over Traditional Tactics, with 34.48% prevailing over a meager 12.64%, it was the Integrated Approach that crushed everything else at 52.87%.
These particular results didn’t come as a huge surprise. The various marketing methods available are as varied as the small businesses they serve. Many have to rely on traditional tactics while others need a completely digital approach. However, it is safe to assume that most businesses will rely on optimizing a combination of both. Many analysts insist that digital methods will eventually outpace traditional methods. However, while the data gathered here and in our own professional experience do highlight a growing trend towards digital platforms, they both also highlight a complimentary and healthy reliance on more traditional methods in the world of marketing.
Conclusion
The data collected from our survey paints a remarkably optimistic picture.
In terms of present standing and outlook, not only did business owners project strong standing in 2023, but they also projected some deep optimism for 2024 in terms of growth. While there was also a heavy handed sense of moderate expectation just below.
In fact, not only did these results showcase a resilient small business outlook, but also hinted at a deeply positive trend.
In conclusion, the survey results collectively unveil a small business ecosystem brimming with resilience, confidence, and ambition. As we step into 2024, it is evident that small business owners are not merely weathering the economic landscape but are actively shaping it with their positivity and forward-looking aspirations. The unexpected level of optimism revealed throughout our exploration serves as a testament to the indomitable spirit of entrepreneurship, and we eagerly await the unfolding success stories that will undoubtedly define the business landscape in the coming year.
