As business leaders look ahead to the future, it’s important to understand the major changes and challenges that will be taking place in 2023. It is essential for any leader to identify potential threats and opportunities to remain competitive in their industry. This article will provide key takeaways from experts on what U.S. business leaders should expect in 2023. In particular, we focus on the impact of technology, global economics, and other factors that will shape businesses in the next four years.
Here are some of the key takeaways from the 2023 outlook for business leaders.
JP Morgan Shares 2023 Outlook for Business Leaders: Overall Insights
Since 2011, JP Morgan Chase does an annual Business Leaders Outlook survey, and we wanted to talk about the 2023 survey here. In late 2022, Chase surveyed more than 1,000 leaders of businesses that have annual revenues between $100,000 and $20 million. The survey includes a wide array of industries as well.
They listed some of the biggest takeaways:
- 65% of business leaders in the U.S. are anticipating a recession in 2023.
- Optimism about the state of the global economy has dropped drastically from 12 months ago – only 8% of leaders are optimistic now as compared to 34% last year.
- 88% of leaders are expecting to add to their staff this year, making the workforce outlook very positive.
- 39% of leaders say their supply chain issues have improved over the past 12 months.
There were some other key areas within the report that we want to talk about, and we’ve broken down those findings below.
Economic Outlook: Inflation and Rising Expenses
More than 4 out of every 5 midsize businesses surveyed have reported they are passing costs on to customers. And 94% of small businesses say inflation has impacted expenses, many by 11% or more since last year.
Most leaders expect their business costs to rise and they will likely be increasing the prices of their products and services in 2023 as a result. These expenses include everything from the cost of goods to rent, energy, and cybersecurity.
However, because small businesses are less affected by national and international market fluctuations, leaders of these businesses are slightly more optimistic than those who are running larger operations.
To combat inflation, here are some of the top ways companies are adapting, according to Chase:
- Raising prices (77%)
- Making purchasing changes (44%)
- Automating processes (36%)
In addition, fewer (27-28%) of businesses experiencing inflation in this survey are employing other solutions like strategic stockpiling, watching the changes in relative prices, and changing their core pricing model. What is your business doing to prepare for and combat inflation this year?
Employment and Hiring: 2023 Outlook
There are still lots of job openings that businesses are hoping to fill this year, and among those leaders surveyed who are planning for staff increases in 2023, the top response to these labor shortages is increasing wages and/or benefits (67%).
Several other respondents are offering upskilling and training, investing in automation, providing flexible work locations, and offering flexible hours. The work-from-home movement is still going strong and employers are going to have to meet some of these candidate-driven expectations if they hope to stay competitive in the job market arena this year.
Hoping for Growth: Strategies
Chase reports several top external business threats, including general market volatility, competition, cost of debt and access to capital, energy prices, and cybersecurity and fraud. But despite these challenges, many businesses have plans to grow and transition before the year is over.
The top growth strategies for the next 12 months include:
- Introducing new products and/or services
- Strategic partnerships and investments
- Focusing on touting the most profitable products
- Expanding into new domestic markets
- Seeking mergers and/or acquisitions
With some uncertainty around what the economic and labor markets will look like in the next few years, it’s important for businesses to continue redefining what works and what doesn’t.
But many businesses agree that a few core changes are likely going to yield positive results for business outlooks in 2023 and beyond. These changes include investing in your staffing to foster engaged and committed employees, hybrid work, and building community (from social media to client relations and more).
Set Your 2023 Business Goals without Worrying About How to Track Your Finances
Whether you are gearing up for growth this year by increasing capacity, expenses, and other areas to accommodate for it, or you are tightening up your operations to weather an anticipated storm, you’ll need the best payment solutions to make sure things run smoothly from a financial perspective. The 2023 outlook for business leaders is clear: prices are increasing, and that means you need to make sure your operations stay profitable.
We can help you keep your income and expenses straight so you have a good understanding of your business’s financial health as you take your business into the future.