Change is inevitable, especially in business. Across various generations, companies and organizations have to adjust to recent trends, change marketing strategies and utilize new technologies.
One of the biggest changes businesses have to learn to adapt to is digital transformation. More than 38% of traditional on-site companies have started to employ digital strategies to complement their operations and business goals.
A downside of these changes is that no CEO or founder of a business is 100% an expert. There are always challenges to keep up with the ever-changing world. Things like satisfying customers, dealing with inflation, and battling cyberattacks — all while ensuring your employees stay satisfied with their working environment.
Table of Contents
- Main Challenges in Business in 2023 and Beyond
- Financial Instability and Inflation
- Labor Shortages
- Supply Chain Disruptions
- Rise of Cyberattacks
- Implementation of New Technologies (AI, Blockchain, IoT)
- The Need for the Adoption of An ESG Framework
- Increased Customer Expectations
- Employee Burnout and Motivation
- The Necessary Transformation From A Traditional to An Agile Organization
- You Can Build a Money-Making Business Today
Main Challenges in Business in 2023 and Beyond
Challenges can prevent businesses from achieving their goals, meeting potential customers, and increasing overall revenue. As the founder or CEO of your business, you must be futuristic in creating strategies that can overcome these challenges and help your business generate sales in a time of crisis.
Let’s look at a few of the main business challenges in the coming year and beyond.
Financial Instability and Inflation
News about inflation continues to dominate the headlines, and they are likely not going anywhere. With the instability and uncertainty of inflation, businesses must create strategies to stay prepared and prevent potential losses.
So how can sudden inflation cause financial instability? For starters, if your business is all about manufacturing products or is part of the food industry, you can become majorly affected by increased prices of raw materials.
Let’s not forget the prices of overhead and inventory costs. When there’s inflation, the products and raw materials are not the only ones affected.
You can be looking at increasing the wages of your employees, as well as your rent and utility costs. Moreover, if your business ships internationally, don’t forget about the ever-growing fuel surcharges and freight rates!
All these can genuinely affect your business, sadly leading to financial instability.
Did you know that almost 50% of US business owners experience challenges finding more people to hire?
But behind the grueling effects of labor shortages are a number of factors and causes that contribute to finding fewer people to be hired in both on-site and online businesses.
Let’s talk about increasing health concerns and safety. With the rise of the pandemic last year, more people had to shift to working from home to protect themselves from possibly catching the virus. Moreover, because of the lockdowns and transportation cut-down, more employees found it hard to commute and reach their offices.
The effect of the pandemic also led more employees to look for jobs based on the following:
- Rewarding work or positive reinforcements
- Better pay
- Professional development
People have become more specific with what they want, causing more businesses to lose their current staff as their employees pursue their happiness. This is particularly true as one-fourth of the United States workforce seeks new opportunities and experiences a career transition yearly.
The problems don’t end there. Labor shortages have also proven to affect overall customer experience because industries that have felt the most negative effects involve communication, customer service, and support.
With that in mind, businesses should learn to adapt to what the working population needs to get still new workers willing to learn and work hard. For example, they’ll need to analyze demographics and statistics to get a better feel for what workers are motivated by and then adjust compensation packages accordingly.
Supply Chain Disruptions
The next challenge is closely related to inflation and increased prices of raw materials. When the prices of raw materials go up, it’s natural for consumers to feel the effect through more expensive product prices in the market.
Additionally, the increased cost of raw materials can also disrupt your supply chains and vice versa. So, for example, you won’t get the products you need because of the lack of supply and as a result, prices increase.
Getting your supply chain and order fulfillment straight can help you reduce supply chain disruptions and, in turn, can help keep prices affordable both for you and your customers.
This is why your business should have multiple suppliers in case one supplier runs out of raw materials. It’s also an efficient way to test your supply chain’s resilience, which is what you need during uncertain inflation events.
When you have multiple suppliers, you can test how well your organization will stand up if one supplier is unable to provide services, ensuring that your company can keep up with demand in any situation.
Rise of Cyberattacks
With the rise of cloud-based and online storage for information and business-related concerns also came the emergence of cyberattacks. More common in small businesses, cyberattacks can be detrimental to your business, especially in the event of a scam, fraud, or theft.
A cyber readiness ready report by Hiscox revealed 6% of businesses resort to paying hefty ransom amounts to regain complete control of their IT systems from attackers. And because systems were automatically reformatted after the attack, companies also had to shell out even more money to pay for operational disruptions.
And for companies that were not able to retrieve essential information back, they had to suffer from a long-term negative effect – gaining a bad reputation and feedback from clients. Moreover, these companies had to pay millions for settlements.
And finally, losing revenue is probably the worst damage your company can experience from cyberattacks. Even multinational and famous companies, like Sony Pictures, have been victims of hateful attacks by hackers.
Implementation of New Technologies (AI, Blockchain, IoT)
Let’s face it. Even though digital transformation is widely famous in businesses, it takes a lot of getting used to. This is considering your company has been doing everything the traditional way, including storing information, accessing documents, and reporting to your on-site office.
But beyond these superficial challenges, digital transformation can bring mountains of benefits for your business. There’s an increase in brand awareness, employment of better marketing for eCommerce strategies, and possibly meeting new people and turning them into your customers.
The challenge behind these new technologies is your business should be prepared with the available resources to utilize them. Or else you might fall behind your competitors and lose revenue.
One example is artificial intelligence, which has been the standard for most businesses thanks to new tools. You’ve likely heard about ChatGPT non-stop recently. There are also improvements and changes in past emerging tech including 5G, IoT, and cloud-based SaaS platforms.
Technological developments should also pave the way for re-designing your operations while including these intelligent machines to make your life easier and satisfy more clients.
The Need for the Adoption of An ESG Framework
An ESG framework involves a systematic way of assessing, identifying, and integrating various impacts on a business. These include environmental, economic, and social factors your company can use to improve goals and set more realistic strategies and policies.
An ESG framework can also help identify what risks your business is facing and how they can negatively affect your company’s growth. Other benefits of utilizing this framework include:
- Reducing overall costs, including raw materials and operational expenses
- Looking for new markets and expanding your current community
- Decrease adverse government action risks
- Make your employees more productive
Why does the new ESG framework pose a challenge to businesses? It’s technically not the framework that’s alarming, but the reporting of analytics. Moreover, business experts reveal that how ESG frameworks are utilized can be damaging because of ill-though distractions, metrics, and standardization.
Moreover, there are about 600 ESG approaches used by various business sectors. And this is not good because of no synchronicity and harmonization. With so many different approaches, it can become hard to make them work cohesively with your business goals.
Additionally, when there are too many approaches in use, it can create confusion and disorganization. The ESG framework cannot provide your business data about each employee’s tasks and roles.
Increased Customer Expectations
Today, customers want more. They are more vocal about their demands, especially when it comes to the kind of client satisfaction they want to experience. When potential customers enter your store, they want more than shopping for new clothes for themselves. They want to have a fulfilling in-store experience.
However, customer expectations also go beyond the in-store offerings. Providing fast order fulfillment and good customer service in the shop now isn’t the only way to help customers. Clients also expect you to have a strong online presence that provides an engaging customer experience.
One way to meet these rising expectations and appeal to the new virtual customer is to start thinking outside the box.
For example, how about merging virtual reality and your marketing strategy by creating virtual dressing rooms for people shopping online? Amazon did just that, enhancing customer experience and giving shoppers a better way to visualize purchases. Not only does this improve UX, but it can also reduce returns and exchanges since users already have a feel for what the clothing looks like on them.
Another way to think outside the box is to combine online and in-store sales using an eCommerce platform such as Shopify. Instead of having to think about the pros and cons of a physical store versus an online store, this can help you increase the total number of sales and connect with your clients on various sales channels.
Employee Burnout and Motivation
Another human resource challenge your business should be ready to overcome is the rise of employee burnout and lack of motivation. But remember that this primarily depends on your company’s work environment and how you treat your staff.
When people are now vocal about what they want, it’s no excuse that employees can feel a burden when they are not satisfied with how their leaders and bosses treat them. And remember that when your employees are constantly experiencing fatigue and burnout, they are more likely to resign.
Where does employee burnout come from? Reports say it stems from accomplishing too many priorities and the mere fact of always having to report physically to work. Multitasking is the name of the game for most businesses. But unfortunately, it makes employees feel more exhausted most of the time.
The Necessary Transformation From A Traditional to An Agile Organization
Agile organizations can change how you operate your business. When traditional organizations are used to a structural, static, and siloed hierarchy, agile organizations consist of networks of teams that can help in rapid decision-making and learning cycles.
Moreover, agile organizations can combine stability and efficiency with adaptability and velocity. And allowing your company to shift to this organization can make things easier, especially with your employees. An agile organization’s trademarks enable brands to improve their foundations and appear better and more developed for their customers.
But even with the innovative ways of agile organizations, several failures have also been reported due to the following:
- Lacks leadership support
- Popular agile methodologies improperly applied
- Lack of commitment
- Rushing each process in the transformation
These reasons can easily be avoided when your business completely understands how an agile organization works. You should become knowledgeable about all four domains, which comprise the following:
|Feature and Definition
|Know about how the system works and what it prioritizes
|Relates the process of structuring organizations
|Becoming more specific about what culture your business wants to adopt
|Your team’s overall degree of self-independence and work ethics
You Can Build a Money-Making Business Today
Starting your own business can be a bold move, but once you have properly set up its foundation, your goals, and your team — everything else should follow.
Overcoming the challenges mentioned in this guide can help you transform your organization into a better company with satisfied team members and clients. Moreover, it will improve your brand image for future transactions.
Remember, challenges are an inevitable part of the business world, but with perseverance and a commitment to growth, you can overcome them and emerge stronger.
Building a profitable business requires effort, dedication, and a willingness to adapt, but the rewards are well worth it. So take the leap, trust in your vision, and work hard to bring your business to the next level.