Even in the most favorable economic environments, some industries will thrive while others struggle. It’s the nature of the business game, and 2024 is likely to bring its fair share of “booming” and “busting” industry segments.
The industry sectors expected to thrive in 2024 include:
- Travel operators. People are expected to spend money on personal experiences and invest in more domestic and international travel. This trend is likely to continue and it should put travel agents, tour guides, and other travel-related small businesses in a good position over the coming months.
- Companies that make, sell, and support hybrid and electric vehicles. Makers and distributors of these eco-friendly vehicles are expected to stay busy regardless of the current economic conditions. Smaller entities that provide battery recycling, EV stations or EV diagnostic centers are likely to cash in on this trend.
- Information technology companies. From social media consulting and web design services to laptop repair shops, the number of IT-related small business opportunities is expansive. This is a sector that is expected to expand as more companies and individuals use technology to manage tasks—from basic to the extremely complex.
- Construction firms. This sector has seen its fair share of ups and downs over the last few years, but experts say organizations in the construction field are positioned to fare well over the coming year. The distributors, subcontractors, interior designers, and other providers that support the construction process will also likely benefit from this rising tide.
- E-commerce retailers. The total percentage of retail sales that happen online will rise to 16.6% -- a number that’s risen steadily over the last five years. Small business owners should pay attention to shifts in shopping habits as essential categories like grocery, health, and personal displace home improvement and large appliance purchases in the virtual shopping space.
At the other end of the spectrum, iron and steel manufacturing; natural gas distribution; paper wholesaling; sewer and pipeline rehabilitation; invoice factoring; and conveyance services that help people transfer property ownership are currently experiencing declines. The latter has been particularly hit hard by high interest rates that could keep buyers out of the market—a trend that’s expected to last for as long as the Federal Reserve continues to bump up the federal funds rate.
6 Actions to Take Now
As the current economic environment persists, there are several strategic moves that companies can make to help off set the impacts of inflation. A good first move is to examine your current costs and ferret out inefficient, unused, unnecessary, or obsolete aspects of your business.
Here are 6 actions to take now:
- Review the contracts that you have in place with your suppliers. There may be an opportunity to incorporate some "win-win" negotiations into these deals. For instance, you may agree to order more frequently in exchange for a price break.
- Check your payroll and see if there's any opportunity to cut back by eliminating excess staff.
- Do a similar check of your physical inventory, sell any off any merchandise that may be stagnating and see if your suppliers will take back any unused inventory that's languishing in your stockroom or warehouse.
- Keep close tabs on your accounts receivables and collect outstanding invoices quickly (don't wait until they're 30 or 60 days past due).
- To boost your cash reserves, try offering your customers discounts for early payments (e.g., 1% discount for net 10 day payment terms).
- Use technology to cut costs, improve efficiencies, be more productive,and even create new revenue streams. For example, retailers can use automation and analytics to ensure that they offer competitive prices and stock products that are in demand. Manufacturers and distributors can also use automation and robotics to optimize their warehouses without hiring more employees. And service companies can use chatbots to address their customers’ questions and concerns on a 24/7 basis.
As the global economy slows, new uncertainties are likely to continue to surface. And, the economic situation isn’t expected to settle much over the next few months. Business owners can best prepare for these variables by staying current on market conditions, talking to customers about the challenges they face (and, considering they can provide solutions and support), and using technology as a pathway to improve efficiency, cost savings, and new revenue-generating opportunities.