According to the U.S. Small Business Administration, there are 33.2 million small businesses in the U.S., employing 46.4% of all the country’s workers. These businesses have a big impact on the U.S. economy through job creation and innovation.
Owning a small business comes with incredible perks like flexible scheduling, pursuing your own projects, and cultivating meaningful relationships with your clients.
But you need to eat and have bills to pay, so at the end of the day, what will your salary look like?
An average small business owner at an incorporated company earns about as much as an average wage or salary earner. But the median income is about 50% lower for owners of unincorporated businesses.
This is also a good time to market small businesses to American audiences. A recent Gallup poll found that 68% of Americans are confident in small businesses — more than any other institution, including the military and police.
One major fear among those looking to start a business (and probably a nagging fear in most current owners’ minds) is the likelihood of an enterprise failing.
Additionally, it appears this is true regardless of which industry you’re in.
It is better to not let these concerns scare you away from pursuing your idea. At the same time, it’s important to be realistic about the threats and risks that small business owners face.
Naturally, cash flow is one of the biggest challenges for growing companies. Founders should think carefully about their funding options. It can be a good idea to invest in yourself, but you also need to make responsible long-term decisions.
Cash flow issues can be alleviated, but they’re also tough to avoid as an owner with limited resources. But some of the other causes of small business failure are easier to plan for.
For example, management issues are one of the most common reasons why new companies go under. Founders often bring unique skills to the table, but it’s difficult to meet all of the demands of a growing business.
That’s why it’s so important to hire qualified employees who can complement your strengths while making up for some of your weaknesses.
The internet has changed the way business is conducted online — and offline.
E-commerce grew steadily throughout the 2010s, and online sales now make up about 15% of all retail sales in the U.S. Those figures include Amazon, sole proprietorships, and everything in between.
Furthermore, the total volume of e-commerce sales has tripled (and more) since 2015. No matter what kind of product you’re selling online, your potential audience is likely much larger than five or 10 years ago.
This trend presents both opportunities and threats for small business owners. On the one hand, the e-commerce market has never been bigger. But on the other hand, it has also never been more competitive or more saturated by other vendors.
Close to 500,000 Americans now work in the e-commerce or mail-order industry. Online shopping has grown so dramatically that the Bureau of Labor Statistics now plans to phase out the distinction between online and physical businesses entirely.
Small businesses might not have needed a web presence in 2002 or even 2012, but websites are a virtual necessity for every company in 2023.
Despite consumer demand for online services, only 64% of small businesses have a website. Even if your company primarily operates at a physical location, creating a website with contact details and other basic information for your audience is still a good idea.
Professional websites are even more important for online businesses.
Along with website design, make sure your site’s performance meets consumer expectations. Each additional second of loading time leads to a 4.42% decrease in conversions. The last thing you want is to lose potential customers because your site was taking too long to load.
E-commerce is closely associated with business-to-consumer (B2C) commerce, but it’s just as relevant for B2B vendors. According to Insider Intelligence, B2B e-commerce sales will increase by over 80% by 2025.
When it comes to hacking, you might think major corporations and government agencies are the main victims. While those organizations are obviously popular targets, small businesses can be even more vulnerable to many attacks.
The Cybersecurity and Infrastructure Security Agency found that more attackers are targeting smaller organizations in order to avoid government scrutiny.
Furthermore, small businesses don’t have the same resources to defend against cybersecurity threats, and a majority of small business owners believe their companies could be vulnerable.
While your business may never match the cybersecurity defenses of Apple or Microsoft, you can still dramatically reduce risk by identifying the most important threats and taking steps to protect your business.
For example, phishing traffic more than doubled after the onset of the COVID-19 pandemic. Basic phishing training is equally effective for organizations of all sizes, and it’s a small investment for a substantial reduction of risk.
Many big and small brands are using bug bounty programs to good effect. As ZDNet notes, “everyone from porn providers to the U.S. Army uses the platform.”
Even if you have an incredible product or service, you can’t reach an audience without a strong marketing plan. Digital marketing is the best way to reach customers across a broad geographic area — whether around your country or the world.
One of the clearest digital marketing trends is the growing emphasis on data. Data-driven marketing is a critical resource for businesses of all sizes, and almost twice as many companies used data in 2022 compared to 2021.
Unsurprisingly, this is coupled with a general rise in digital marketing spending. Statista projects that total digital marketing spending will increase by about 70% by 2026. This can be attributed to growth in advertising demand and an increase in rates.
With that said, marketers also need to be careful about how they use audience data. Almost 50% of consumers are worried about companies gathering their consent before sharing their data with third parties.
Just a decade ago, mobile websites and apps were relative afterthoughts compared to the mobile shopping experience. Today, mobile e-commerce is just as important as its desktop counterpart.
Most internet traffic now comes from mobile devices. When building a website, your mobile visitors should be your top priority. Similarly, roughly 60% of all consumers prefer to shop on smartphones rather than tablets or desktops.
Still, mobile e-commerce has some disadvantages, and mobile users may have different intentions than other leads. Cart abandonment rates are higher on smartphones than on any other device, so you’ll need to attract more traffic to generate the same sales volume.
Search engine optimization (SEO) is all about generating traffic through searches on Google and other popular search engines. Search engines use various factors to rank search results, and highly ranked results are much more likely to attract visitors.
Google no longer dominates searches as it did in the past, but it’s still responsible for over 80% of desktop searches. As a small business owner, it is good to focus primarily on Google before you think about any other search engines.
Despite the widespread focus on SEO, organic traffic is still surprisingly hard to generate. SEO service provider Ahrefs found that less than 10% of all web pages generate organic search traffic through Google.
One key advantage of organic search traffic is it pays dividends over time. While paid search campaigns only last as long as your ad budget, strong SEO practices will keep pushing new searchers to your website.
It’s no surprise that more than 60% of SEO marketers believe mobile optimization is a good investment.
Content marketing can be tricky, especially for small business owners with limited resources. However, content can also be a powerful differentiator. The important thing is to find a niche — even a relatively small one — and make your brand an authority in that area.
One downside of content marketing is that it doesn’t always lead to conversions. While some readers will go on to make a purchase, others will simply consume your content and move on. Attracting quality leads is the number-one challenge for content marketers in 2023.
At the same time, this hasn’t stopped content marketing from being widely adopted throughout a broad cross-section of industries. More than 80% of marketers are actively leveraging content marketing, and we expect that figure to continue increasing over the next few years.
Some elements of content marketing have remained constant, but companies have also been adapting to the new normal. Most marketers have changed their strategies since the beginning of the COVID-19 pandemic.
Your competition is always moving forward, so you can’t afford to stay in the same place.
Email isn’t exactly cutting-edge, but it still has a crucial role in contemporary marketing campaigns. Four billion people use email daily — more than half of the global population.
That’s nearly as many total users as social media. Furthermore, email is an opt-in channel, which means that leads have to make the choice to receive your content.
Consider the difference between scrolling past an Instagram ad on your phone and receiving a notification for an email newsletter to which you’re subscribed. Most users will gloss right over the social media ad while spending more time looking at the email.
Even so, just over 20% of all emails are opened by the recipient. Open rates can fall for a number of reasons, including poor subject lines, low deliverability, and emails arriving too frequently.
Remember that you can’t generate clicks or conversions unless you first motivate the lead to open your message.
Most emails are opened on mobile devices. Like other forms of content, your emails need to be optimized for display on a small screen. Avoid long strings of text, and make sure that the message is visually clear and easy for readers to skim.
Social media is another ideal channel for connecting with audiences and developing a unique presence. The key advantage of social media is its reach — billions of people use it every day, and a typical user spends almost 2.5 hours on social media per day.
Even better, you can post content on many different social media channels without much additional effort. While each platform is different, you can generally repurpose content for various websites by making some simple changes.
For example, a Facebook post could be edited down to a shorter length to be posted as a Tweet.
B2B and social media
Social media is still important even if you’re engaged in B2B marketing instead of the more traditional B2C marketing. If this is your area, remember your peers are active on social media.
With 80% of all B2B social media leads, the most popular option is LinkedIn, though Twitter, Facebook, and YouTube are widely used as well.
You should also remember that:
- 40% of B2B buyers search for product/vendor information on social media
- 75% of B2B buyers and 84% of executive-level personnel use social media to help make purchasing decisions.
The term “small business” encompasses a variety of business types, from freelance writers to brick-and-mortar stores, street food vendors, and growing multinational corporations.
You could call an organization with up to 500 employees a “small business,” but most come closer to the bottom of the scale. One- and two-person teams (known in the U.S. as sole proprietorships, partnerships, or non-employers) make up a majority of small businesses.
In fact, over 80% of small businesses have no employees at all, a percentage that has increased rapidly since the 1990s. Small businesses may not match the capabilities of major corporations, but they continue to drive job growth and disrupt a variety of industries.
How To Obtain Financing for Your Small Business in 2023
A successful small business depends on two things: ideas and execution. Deciding how to fund your business is one of the most important decisions you’ll make in the early stages.
Financing comes in many different forms, each of which introduces unique pros and cons. For example, some small business owners sell equity in exchange for investments. This minimizes upfront costs, but it could also put a substantial dent in your returns later on.
Debt financing, on the other hand, works more like a traditional loan. You won’t have to give up a share of your business, but you will have to pay the money back with interest.
There are also government grants and loans specifically intended for small businesses. Our list of small business grants is a great resource that includes all kinds of grants for companies in various fields.
What To Do Next
No matter where you are in the process of growing your small business, it’s always good to have more data. Understanding the threats and opportunities you face will help you make informed decisions in the best interest of your company.
At Digital.com, we offer detailed resources for all kinds of small businesses. Continue reading to learn more about the small business environment in 2023.