2021 was a tough year for small businesses.
If you managed to walk through the fire without the flames setting you ablaze, congratulations. We salute your hard work and entrepreneurial sprit.
Though 2022 promises to bring its own set of unique challenges, anticipating some of those challenges allows small business owners and operators (SBOs) to plan accordingly.
So without further adieu, here are four trends and predictions that will impact small businesses in 2022.
1. Supply chain bottlenecks are here to stay
What was supposed to be temporary is here to stay. SBOs who prioritize supply chain management in 2022 will benefit the most. Period.
2021 taught us that being overly reliant on a single geography or supplier for key products and raw materials is bad for business.
Diversifying geographically, seeking alternate shipping routes, and adopting emerging supply chain technologies is a good way to start mitigating supply chain risk in 2022 and beyond.
2. Inflation will continue to suck energy out of small businesses
Although the Fed is scaring markets with a triple threat of tapering, don't believe the hype.
If Old Man Winter were a betting man, he'd safely bet that another round of stimulus (bigger than the one we already saw) is on the horizon. This means more inflation, a hidden tax that stifles small business growth.
The ability to streamline a business and shift a company's production, marketing, and sales focus to higher-margin products will determine whether small businesses turn a profit or go out of business in 2022.
Expect more small and medium-sized businesses to start protecting their balance sheets by sweeping excess cash reserves into a store of value like this small restaurant chain in Canada.
3. Hiring and retaining employees will remain challenging
A recent survey found only 20% of U.S. workers are very passionate about their jobs. This comes at a time when the power dynamic between employer and employee has shifted for good. Employees now have the upper hand.
Small businesses will need to find creative and innovative ways to attract and retain talent. Look for many to focus their human resource efforts on employee experience, coaching, and mentoring this coming year.
Employees need to feel like they're part of a greater good. Businesses that set clear goals and create a map that shows each employee exactly how he/she helps the organization reach those goals will attract and retain the best talent.
4. Small businesses will adopt SaaS en masse
The adoption of software as a service (SaaS) will allow small businesses to do more with fewer employees.
Smart investments in business software that help small businesses collect data, analyze data, and automate work processes can enhance the customer experience despite challenging staffing shortages.
Look for brick-and-mortar retailers to adopt e-commerce platforms that provide frictionless user experiences as the “buy online, pick up in-store” option hits a tipping point in 2022.
Operating a small business is hard. Staying profitable in today's environment is doubly hard. Don't give up. We're rooting for you.
Stay alert. Stay educated. And most importantly, stay cool.
Have a great 2022!
Talk soon,
Old Man Winter
