The quote ascribed to Yogi Berra – “It’s tough to make predictions, especially about the future” is just as true for business as for baseball, but we can observe how the business and economic environment has evolved over the past few years to get a sense of the trends and issues CEOs and their leadership teams should focus on in 2024 to develop effective growth strategies.
The US economy is expected to grow by 2.2% in 2024, according to the Congressional Budget Office. This creates a positive base for Small to Medium Enterprises (SMEs) to expand their sales and operations. Rising inflation, however, means costs will be higher, leading to some combination of higher prices for customers or lower profits for businesses.
While the global supply chain has improved since COVID caused significant disruption, the trend over the past decade has been disruptive in general, and businesses need to invest in making supply chains more resilient. While there is no shortage of technology available, the question is whether the pressure of short-term ROI and higher borrowing costs will overcome the need to invest for the long term.
Just as in 2022/23, labor shortages in key industries remain high, making it difficult for SMEs to find and hire workers, possibly restricting growth.
With that as a broad backdrop, here are ten factors for CEOs to consider as they look for growth acceleration and risk management in 2024.
- Artificial Intelligence – It’s already affecting how we work and play, but businesses will need to explore how the integration of AI technologies can streamline operations, enhance customer service and provide key insights from data while being deployed in an ethical manner.
- Digital Transformation – As the digital transformation persists, investing in one’s online presence, e-commerce capabilities and digital marketing will help reach and engage customers by making transactions easy and seamless.
- Remote and Hybrid Work Models – Due to COVID, remote work has become more accepted, and businesses may need to embrace remote and hybrid work models, leveraging technology to facilitate collaboration and communication.
- Sustainability – The emphasis on sustainability and environmental responsibility is growing, driven by customers and employees alike. Businesses may need to consider eco-friendly practices for corporate social responsibility and as a way to meet consumer preferences for sustainable products and services.
- E-commerce growth – Black Friday shoppers spent a record $9.8 billion in US online sales, up 7.5% from 2022, according to CNBC. E-commerce sales will continue to grow, so businesses will want to prioritize their online stores, streamline and improve the user experience, and explore new channels for digital sales.
- Personalization in Marketing and the Customer Experience – Consumers increasingly expect personalized experiences. The challenge is how to use technology to tailor marketing messages, products and services to individual preferences and “meet the customer where they are”, whether online or in person.
- Cybersecurity – All the digital technologies mentioned above are increasing in use, thus cybersecurity will remain a critical concern. Businesses will want to examine their investment in cybersecurity measures to protect data, customer information and online transactions.
- Expanded payment options – Consumers are using digital wallets and “buy now, pay later” services, so payment systems may need to be adapted to accommodate these trends.
- Local and Community Engagement – Related to personalization in marketing, community engagement has gained importance as a way for businesses to differentiate themselves and build customer loyalty.
- M&A Activity – 98% of CEOs plan to pursue strategic transactions in the next twelve months, according to EY’s CEO Outlook. While deals may be smaller due to interest rates, capital is readily available for high performing companies in the tech, energy, health care, life sciences and Smart Manufacturing segments. Cross border M&A may rise as supply chains evolve, so an understanding of local regulations, cultural sensitivities and geopolitical issues will be required.
Small to Medium Enterprise CEOs can look forward to a world of opportunity in 2024. They can navigate the changing business landscape successfully by embracing technology, prioritizing sustainability, and focusing on personalization. These are not mutually exclusive initiatives and should be integrated into creating business growth strategies that are forward thinking and resilient.
Given the market and activity variability expected in 2024, the proper allocation of resources is needed to maximize return on investment. CEOs have found partnering with experienced advisors, such as Newport LLC partners, provides an experienced and independent voice to help navigate uncertainty and decrease the risk in decision making. If that’s you, find us at Newport LLC
As we said in the beginning though, “It’s tough to predict the future”, so staying informed and adaptable will help you seize the opportunities that 2024 offers.
