Looking Ahead to 2022: Five Experts Share Their Predictions and Advice for Business Owners

  • What is the financial outlook for SMBs in 2022?
  • Will you be bullish or bearish in 2022?
  • What concerns should SMBs be aware of?

Wed Nov 24 10:20:00 EST 2021

Inflation, labor shortages, supply chain issues, and cash flow. These four areas of business represent the “cornerstones of concern” for millions of companies as we get ready to welcome in the New Year. As millions of business owners prepare to wind down 2021, they simultaneously are gearing up to hit the ground running in 2022. But there are those “concerns” noted above.

To help our readers and followers, I asked five SMB experts to share their predictions for next year along with advice that they are giving to their clients, members, and followers. Below are responses from Bryan Kramer, Rieva Lesonsky, Andrew Sherman, Bridget Weston, and Barbara Weltman, all widely recognized experts in their fields within SMB.

Brian Moran: What is the general financial outlook for SMBs in 2022?

Bryan Kramer: According to the McKinsey Quarterly survey, respondents agree that digital technologies will have an impact on their company over the next three years which I believe will have a direct financial impact on SMBs in 2022. While innovation is a challenge for SMBs, as they have fewer resources and less time to invest in learning new processes and ways of working, it becomes more critical that it should be where they put more focus. While many SMBs always say that improving customer engagement is the top priority, few will follow through. I believe that by focusing on two things in innovation of technology it will help them lead more in these 2 areas: 1) Building a comprehensive digital-marketing function that can work to personalize their message to individual customers. 2) Investing in changes to the organization that would enable more productivity in their onsite and/or remote working around their products and services that creates efficiency enabling them to scale and grow.

Andrew Sherman: My general outlook for SMBs in 2022 is very positive. As we get on the other side of the Covid pandemic and the reopening of the economy, things should improve rapidly. Many small business owners continue to face supply chain and workforce and staffing challenges; however, I see potential solutions to both issues by the second quarter of 2022. Another area likely to grow is small business startups and Solopreneurs. Nearly 8 1/2 million people quit their job in July and August 2021 and many of these people will return to the workforce over the next few months as business owners or independent contractors which should help fuel the growth of the overall small business economy. I think inflation risk will be relatively short to medium term and will not necessarily harm small businesses directly or at least not in select industries where price increases can be passed on in whole or in part to customers. It is critical during this period to build strong brand and customer loyalty to have the pricing power needed to increase prices as your cost of goods sold increases.

As far as capital accessibility in 2022 and beyond, there are still stockpiles of equity in many venture capital and private equity funds that have yet to be deployed. On the debt side, interest rates remain very low and are likely to stay low until late 2022. Many companies are offering more aggressive trade credit as the economy improves and reopens and there is a growing number of venture capital firms that may be a viable solution for certain types of small business owners. There is also a significant uptick in corporate venture capital funds, which are focused on strategic investment and corporate partnering and venturing. Finally, and perhaps most importantly, the significant gains in the stock market coupled with the increase in real estate prices and valuations have made many private investors feel more angelic, and the number of angel investments is predicted to remain strong for 2022 and beyond as well as being restored and many of these angels are looking for Investments where they can be hands on and add value and not just passive investors.

Brian: Are you bullish or bearish about 2022? Should companies be stockpiling cash or putting it to work and investing for growth?

Barbara Weltman: Unfortunately, I’m rather bearish about 2022 for several reasons: inflation, supply chain problems, and a tight labor market. All these issues combine to make it very difficult to be profitable in 2022. With that said, while having an emergency fund for the business is a great idea to pay bills during a cash flow crunch, I still think companies should be investing for growth. Consider, for example, buying new equipment which can make a staff work more efficiently and likely will use less energy. An investment in AI may also make sense to replace some tasks that would otherwise be done by employees. One business owner I know is thinking about getting a warehouse to stockpile inventory instead of merely keeping a few things in the back of the store (until now he’s run very lean on inventory because it was always easy to replace quickly).

Rieva Lesonsky: I am bullish about 2022 for small businesses. We are still a consumer-based economy and consumers are spending. Of course, it’s up to small business owners to make sure they’re offering consumers the shopping environment they feel most comfortable in.

Omnichannel shopping is key today—and small business owners need to make sure their websites are up-to-date and optimized for speed.

That said, business owners need to create a savings/spending plan. Of course, you should “stockpile” some of your money, you never know if there’ll be a COVID resurgence, if you’ll need to give your staff raises, or if your other expenses will rise. But you cannot grow (or even maintain your current sales) if you don’t reinvest in your company. What upgrades have you postponed? Is your staff complaining because of outdated technology? Is your website lagging? Is your Wi-Fi spotty? Do you have top-tier security protection?

What about your marketing? Are you exploring new marketing options, or staying with what’s “always worked?" Consumer buying habits have significantly changed, (baby boomers are the fastest-growing category of online shoppers), which means the “same old” marketing plan likely will not work anymore. If the past two years have shown us anything, it’s that while we need to create a strategic growth plan, we also need to be flexible—and expect the unexpected.

Brian: What are the biggest concerns you have about 2022 that SMBs should be aware of?

Bridget Weston: It’s widely known that our country is facing historic labor shortages and tremendous hiring challenges, and that issue significantly impacts America’s small businesses.

In a recent survey by SCORE, 63% of small business owners report that hiring the right talent is their number one challenge. This is a particularly significant finding. Historically, business owners cited their top concerns as getting customers and financing.

Furthermore, two-thirds of business owners report having unfilled job openings within the past six months. Once employees are hired, 63% of entrepreneurs cite troubles with retention.

These are issues SCORE doesn’t see going away anytime soon, and neither do our small businesses -- 55% of them say they’re expecting to see hiring challenges continue into 2022.

With that said, we’re still seeing some positivity in the small businesses space, as more than two-thirds of our business owners are optimistic about business growth over the next six months, despite significant hiring challenges.

Showing true entrepreneurial spirit, small business owners remain optimistic despite COVID-related challenges, our survey shows. To hire and retain talent, they are increasing wages, offering remote work opportunities, and providing professional development. We’re seeing our small businesses pivoting to tackle these hiring and labor issues, but they do remain a threat into the new year.

Thank you to our experts for taking time to share their experience and insights with our readers. We wish you all the best during the holiday season, and a prosperous New Year.