This year was a mixed bag for small and midsize businesses (SMBs), with economic volatility, as well as signs of recovery. SMBs faced challenges, but they also showed ingenuity and adaptability. Pivots like these can be the seeds of growth, and in order for small businesses to be successful in 2024, they must remain adaptable, embrace technology, implement cybersecurity, and focus on a customer-centric approach.
To identify the opportunities for this upcoming year, we should look at what small businesses overcame and what adjustments worked in 2023.
Navigating supply chain challenges and economic uncertainty in 2023
This year, unpredictable supply chain challenges significantly affected the global business landscape, including small businesses – from inventory management, costs of goods, order fulfillment, logistics and more. These are the residual effects of supply chain bottlenecks experienced during the height of the pandemic. As a result, the supply chain is now reorganizing, with new strategies such as nearshoring stepping into the forefront.
It should come as no surprise that economic uncertainty persisted this year, but it wasn’t all bad, however. There were residual issues that small businesses and the wider economy contended with, but there were also signals pointing in the right direction.
Small business resilience and transformation into the evolving digital landscape
This year, given the constant flux in the external socio-economic landscape, small businesses had to be creative and calculated. Some SMBs narrowed their focus, while others pursued new avenues, all with a common theme of increasing investments in digital infrastructure and e-commerce.
This year saw a rise in niche businesses, with owners carefully curating and doubling down on one area of focus. We saw many businesses take advantage of the expansion of the digital economy, which only accelerated in the last few years, by streamlining pared-down offerings to wider customer bases. More entrepreneurs and business owners are favoring businesses built for one purpose over being a one-stop shop for everything.
Second, remote and hybrid work environments opened the door for people to take on “side hustles.” While these exist as another entry in the gig economy, with employees and entrepreneurs pursuing these “extracurricular” activities in their off hours, many of these solo ventures will mature into bonafide small businesses in a few years.
Last, the accelerating digitalization that laid the groundwork for the above developments bolstered confidence in e-commerce. Small businesses see a tremendous opportunity in digital commerce based on the trajectory of their investments. According to our State of Small Business Survey, 27% of SMBs upgraded their internet bandwidth in 2020, which jumped to 52% the following year. That number has held steady at 51% and 53% in 2022 and 2023, respectively.
What’s ahead in 2024
The hesitation in the market will likely peter out this year. With manufacturing reorganizing, the supply chain beginning to stabilize and SMBs continuing to upgrade bandwidth, we are sure to see SMBs invest more across the tech sector. In some ways reminiscent of 2023, some small businesses will explore new avenues in 2024 while others will shore up and optimize existing resources and infrastructure.
In the last few years, SMBs have incorporated more SaaS solutions into their tech mix. While these solutions have provided small businesses with enterprise-grade capabilities, managing a growing collection of SaaS providers has become more and more burdensome. SMBs will look to partners that can offer multiple solutions on one platform in order to reduce costs, boost productivity and streamline operations.
While SMBs may rein in SaaS, there’s a good chance they will explore more AI use cases this year. Plenty of small businesses continue to balk at implementing AI, with 45% of small businesses concerned about implementing AI and 43% fearing that it would expose them to cybersecurity threats, according to the aforementioned State of Small Business Survey. The pendulum is starting to swing in the other direction, however. More than a third of SMBs (35%) believe AI can help them offset pain points caused by the labor crunch, 43% think AI can unlock additional revenue streams, and 45% of SMBs that currently use AI solutions say AI helps them focus on core business functions by saving them time.
Economic restraints are set to loosen in 2024, but SMBs will likely remain circumspect in their approach. They won’t abandon SaaS, but they’ll probably reassess their stack. And while they won’t dive headlong into AI, they’ll probably explore the technology a little more even as the novelty of ChatGPT wears off. This approach will serve them well. They are agile enough to try new things without incurring significant penalties, but they don’t have the resources to maintain a surplus of tech solutions.
For more information, visit Verizon’s Small Business Solutions page for information on solutions for small businesses.
Aparna Khurjekar, Chief Revenue Officer, Business Markets and SaaS for Verizon Business. As Verizon Business’ resident head of small business and Saas, Khurjekar is responsible for the strategy to accelerate 5G growth, new products, go-to-market operations for the company’s small and mid-market wireless & wireline offerings and Verizon Connect. Her P&L ownership for this segment includes the omnichannel expansion of wireless, wireline & IoT solutions through direct and digital sales and Verizon’s partner networks. Khurjekar leads a team of more than 3,000 sales professionals, who guide customers through digitally transformed journeys with innovative managed solutions for total connectivity, communications and collaboration.