Strategies for small businesses to navigate the current economy

As the second half of 2024 comes into focus for small business owners, Greater Worcester entrepreneurs like those in the rest of the country are confident in their businesses. According to new Bank of America research, business owners anticipate revenue growth for the year ahead and are feeling confident in the overall economy, despite economic concerns.

Stephanie Martin is preferred business banking manager, and Chris Hudach is small business banking manager at Bank of America.

Entrepreneurs’ concerns around several key economic factors remain elevated nationwide but are down from last year. While concerns around supply chain issues and a recession are down significantly, concerns around inflation and interest rates only slightly dropped, as the Federal Reserve holds interest rates at a 23-year high until inflation becomes more manageable. Additionally, the political environment and healthcare costs are top of mind for small business owners. Despite these concerns, the majority (65%) expect their revenue to increase in the next 12 months. 

So, how can business owners meet their revenue expectations as we head into the second half of 2024?

Conduct a SWOT analysis 

It’s always smart to conduct routine evaluations of your business, especially ahead of any upcoming shifts in the economy or impacts from the political environment. Consider finding time to analyze your business’ strengths, weaknesses, opportunities, and threats. A SWOT analysis not only helps evaluate the state of your business but will help identify what changes and tradeoffs are needed. In fact, 70% of small business owners say they have made tradeoffs to maintain profitability, including personal sacrifices, such as working more hours or reducing their own salary, and operational changes, such as increasing prices or reducing marketing costs. Before implementing any similar adjustments, make sure your decisions are informed by your SWOT results. 

Monitor your cash flow

By tracking current and anticipated revenue and comparing it with your business’ expenses, you can anticipate when to adjust your business model to avoid unnecessary costs. Digital tools can be helpful to future-proof your business. According to our research, 71% of small business owners have digitally optimized their business and operations in the past 12 months, and over half of those small business owners are using mobile apps or business banking online. These digital tools enable easier financial tracking. When faced with economic uncertainty, this can be particularly useful, allowing for faster and more informed decision-making.

Reconnect with customers

A worrisome economy impacts your customers as well. Take time to connect with your customers and build brand recognition so they continue to show loyalty even when times are tough; 82% of small business owners have implemented tactics to engage with their clientele, whether personalizing interactions with customers, taking steps to implement customer feedback, or hosting community events. You can look to social media platforms to help humanize your business; 65% of small business owners use social media to interact with customers and promote their business through responding to comments, posting about themselves and their employees, and promoting upcoming sales.