Despite economic headwinds, New Mexico small business owners are confident in their abilities to manage their businesses through difficult times.
According to a new Bank of America study, business owners are feeling pressure around inflation and supply chain issues, but the majority surveyed (76%) feel well-positioned for a strong year ahead. Despite expressing concerns about labor and a potential recession, more than half of business owners reported higher revenue in 2022 than in 2021 and expect revenue to increase during the next 12 months.
While small business owners are optimistic about 2023, now is a good time to evaluate your business strategy and goals. The last three years have forced business owners to adopt a nimble mindset as they try to stay a step ahead. Entrepreneurs who are looking to expand their business operations over the course of 2023 should consider implementing the following principles of an adaptable business model:
• Be Flexible: Today’s business owners are equally creative, optimistic, practical and aggressive about the business goals they set and where their business is headed. Business owners should review their plans and remain open to reshaping their direction as the year unfolds. Check your business plan and assess if you need to make changes this year. Our findings show that 91% of business owners say they have a business plan, and most assess and adjust it at least once a year.
• Be Measurable: By setting specific and measurable goals, business owners will be able to determine the effectiveness of their strategies and identify areas where their plans can improve. Setting objectives can help business owners measure the current and future success of their business model. After assessing your business plan and making adjustments, you can set new objectives for the year — which may include an expansion. We’ve found that business owners are more optimistic this year, as 48% of entrepreneurs plan to expand their business, an 11% increase since last spring.
• Be Open to Learning and Embrace Technology: Business owners who commit to learning new skills will be able to better adapt to new challenges. By connecting with fellow business owners and partners, entrepreneurs can gain valuable mentorship and knowledge on how to grow and better their business. We’ve seen an incredible increase in business owners adapting new technology to help their organization — 80% of business owners have digitally optimized their business over the last 12 months, up from 70% last spring.
• Focus on Employee Retention: Fifty-two percent of business owners say labor shortages are impacting their business and, as a result, many entrepreneurs are working more hours, experiencing issues filling job openings and modifying their hours of operation. While New Mexico added roughly 3,000 jobs in April, small-business owners are strategizing to retain employees with modified hybrid work policies, cost-of-living bonuses and more time off. Of the business owners who added new benefits, 75% say the additions have had a meaningful impact on employee morale and retention.
Overall, while confidence in the national economy remains low, with just 34% of business owners expecting the national economy to improve over the next 12 months, business confidence is increasing. Many business owners are anticipating increased revenue over the next 12 months and plan to expand this year. This optimism is inspiring and 2023 will show that there are new growth opportunities for entrepreneurs who are able to be creative, stay flexible, and are open to learning.
Martin Richardson is Vice President of Small Business Banking, Bank of America, New Mexico
Leigh Charles is Vice President of Small Business Banking, Bank of America, New Mexico
The Executive’s Desk is a guest column providing advice, commentary or information about resources available to the business community in New Mexico. To submit a column for consideration, email asmith@abqjournal.com.