Small Business Trends for 2023

Every year, the Small Business Administration (SBA) publishes their thoughts on small business trends for the coming year. We’ve read the report and want to share a few that may apply to your business. If they don’t, they may still apply to your competitors, so it’s good to stay informed. 

2023 number and red question mark on wooden cube block on wood table in room background. Next year planning concept.

1. E-commerce and social commerce continue to boom. 

More than half of global internet users purchase something online every week and it appears those numbers will only grow. Social media has emerged as a serious player. Smart marketers are taking the best of eCommerce and combining it with social media on platforms such as Facebook and Pinterest. We agree that, depending on your product or service, it could be time to adjust your sales model accordingly. 

2. Marketing  online is a must. Still, 60% of customers still want to see, touch, feel and try products before buying. Considering that half of retail shoppers use self-checkout or online forms to enroll or purchase services, it’s time to bone up on marketing your business online. ReferralRock’s article on How the Internet Helps Small Businesses Stay Competitive is a worthwhile read. 

3. Data collection is and will always be a customer concern. We all want to be assured that our information is secure. Protect your clients and customers and build a reputation for trust by installing a Secure Socket Layer (SSL) certificate on your website. Let Forbes list the top services you can trust.  

4. Customer experience is still #1. Research shows that customers value experience over both price and product quality.

Whether over the phone, online or in-person, the customer experience has to be the focus of your strategy. Forbes recently published a great article: 7 Customer-Experience-Related Predictions for 2023. Though published on December 14th, Southwest Airlines evidently failed to read the article.  

All of us at DLMoneyMatters want to wish you a very happy, prosperous, healthy, and exciting 2023. As always, we are a phone call, email, or text message away. Happy New Year!

Most Profitable Small-Businesses

We make a it practice to stay informed about small business trends, news, and issues. Of interest to us, and probably to all business owners, is what are the most profitable industries for small business, and what an average profit margin is for that business. Our list starts at #15:

15. Office Administration Services. Serving as the backbone of business operations from food services to physicians’ offices, these administrative services businesses keep the records, do the billing, help with planning, and handle day-to-day administrative responsibilities.
14. Design Services (11.5%). Small businesses that specialize in graphic design, public relations, website and app development, branding, or anything that adds value to another business’s product, function, or reputation.
13. Consulting Services (12%). These are the management and consulting companies that have an expertise in human resources, marketing, environmental or other specialty knowledge/skill.
12. Churches and Religious Organizations (12.5%). Nonprofit churches are making more and this means they are able to do more to further the mission of the church or organization.
employees11. Machinery and Equipment Rentals & Leasing (12.6%). If you’ve ever rented because you couldn’t afford to buy, there’s an equipment rental company owner finding that it pays to rent as well.
10. Physicians (13%). Becoming a doctor requires years of training, certification and experience, but once established in a practice, one benefits from regular clients and low overheads.
9. Health Practitioners (13%). These are the chiropractors, optometrists, metal-health practitioners, and podiatrists—or everyone who falls under the category “other than physicians.”
8. Real Estate Holders (14%). Once the initial property investment is paid, landlords renting residential and commercial properties do well.
7. Power Companies (14%). These are the private, small electric power companies that are harnessing hydroelectric, nuclear, solar, wind, and geothermal energy. Like those that fill the prairies with windmills and invest in huge solar panels.
6. Dentists (14%). Like doctors, dentists benefit from repeat business, and while start-up costs are still huge, debt is paid quickly because one dentist can handle several patients at a time, and many of their clients pay out of pocket.
5. Legal Services (15%). When business is booming, deals are being made requiring an attorney, and more people can afford lawyers’ fees.
4. Auto Rental and Leasing (15%). Uber and Lyft aren’t the only ones doing well. So are the traditional rental companies like Enterprise and Hertz.
3. Offices of Real Estate Agents and Brokers ($15.5%). In a booming economy, low overhead and low operating costs make for great returns.
2. Management of companies and enterprises (16%). These are small, privately-owned offices of bank holding companies.
1. Accounting and taxes services (19%). No matter how the economy is doing, everyone always needs accountants. Repeat clients make a huge difference too!

What is it about the top four that makes them so profitable? It’s simple. They are driven by human capital. It’s brains and know-how that get product out the door. Each category has relatively low, or exceptionally low, overhead, no warehouses full of parts and inventory, and are comparatively self-contained. They don’t rely on manufactured goods or the global economy. They are run by entrepreneurs determined to succeed, are usually innovative in their thinking, and can implement change easily.

Editor’s Note: There are many lists similar to this one. We’ve taken a conglomeration and rounded off reported profit margins. We don’t mean to ignore the copywriters, funeral homes, cleaning services, landscapers, and all the start-ups and long-time businesses with low overhead and good margins. You are all doing an amazing job keeping the gears greased in this place we call America.