The economic landscape for 2024 is looking brighter than anticipated. The S&P 500 has reached record highs, and the Federal Reserve seems to have achieved the elusive “soft landing” by curbing inflation without triggering a recession. Yet, despite these positive developments, small and medium-sized businesses (SMBs) are bracing for significant challenges in the coming year.
A recent survey conducted by Hello Alice, a fintech platform focused on SMBs, highlights that the biggest obstacle for business owners is raising capital. Nearly 50% report insufficient funding, and 25% struggle with limited access to credit. Carolyn Rodz, CEO of Hello Alice, shared her insights with b., offering advice for navigating the financial hurdles and fostering growth in 2024.
Addressing Financial Challenges
When asked about overcoming financial obstacles, Rodz emphasized the importance of financial health as a cornerstone for growth vtrahe guide you.
“Financially healthy businesses unlock doors to capital, expanded networks, new customers, and contract opportunities,” Rodz explained. However, over 50% of small businesses still face financial instability.
Hello Alice’s focus has been on equipping businesses with the tools needed for financial stability. This includes maintaining accurate financial records, monitoring cash flow, and improving operational efficiency. According to Rodz, these foundational elements not only help businesses access funding but also set the stage for sustainable growth.
Capital, Rodz noted, comes in two primary forms:
- Organic Revenue Growth: This is the most sustainable source of funding and involves attracting customers, optimizing pricing, and maintaining healthy profit margins.
- External Funding: Options like bank loans, venture capital, and crowdfunding can support growth but must align with the business’s model, stage, and goals.
Supporting Small Businesses: A Collective Effort
Rodz highlighted actionable ways individuals and organizations can uplift small businesses in 2024.
Shop Small
The simplest way to support SMBs is by shopping local. Every purchase contributes directly to their revenue and growth.
Offer Expertise
“Everyone has skills that can benefit a small business,” Rodz said. Whether it’s mentorship, professional advice, or networking connections, offering expertise can significantly impact a business’s success.
She encouraged people to reach out to local businesses or startup communities to share their knowledge. For example, accountants can assist with finances, marketers can provide promotional strategies, and legal professionals can offer guidance on contracts. Communities and organizations like SBA offices or local chambers of commerce can also help facilitate these connections.
Promote Small Businesses
Recommending businesses through online reviews or word-of-mouth can drive traffic and build credibility. “Supporting small businesses benefits the community at large,” Rodz added, noting that thriving SMBs create jobs, enhance local infrastructure, and improve overall quality of life.
Advice for First-Time Entrepreneurs
For those embarking on their entrepreneurial journey in 2024, Rodz advised a cautious and calculated approach.
“Operate conservatively,” she urged. Starting a business often requires more time, effort, and capital than anticipated. Rodz emphasized planning for contingencies and bootstrapping whenever possible, especially given the difficulty of securing external funding in today’s economy.
She also highlighted the importance of setting realistic expectations for product development and sales timelines, suggesting entrepreneurs prepare for delays and unforeseen challenges.
Reasons for Optimism in 20
Despite the challenges, Rodz pointed to several reasons for hope:
- Increased Technology Access: Tools like AI-powered chatbots and automation software enable small businesses to scale operations, improve efficiency, and compete with larger enterprises.
- Support for Diversity: A significant number of new businesses are being launched by women and people of color, showcasing the growing diversity within the entrepreneurial ecosystem. However, Rodz cautioned that political debates around diversity and inclusion programs could threaten these gains.
- Expanding Ecosystem: Large corporations are increasingly recognizing SMBs as valuable partners, while banks and financial institutions are refocusing their efforts on providing resources to smaller enterprises.
Building a Path to Equitable Opportunity
Rodz stressed the importance of collaboration between governments, corporations, and nonprofits to create equitable opportunities for all business owners. She highlighted Hello Alice’s commitment to preserving and expanding grant programs, innovation initiatives, and other resources that empower underrepresented entrepreneurs.
“As we navigate this year, it’s crucial to ensure every business owner in the U.S. has the chance to bring their ideas to life,” Rodz concluded. By fostering a supportive ecosystem, small businesses can continue to grow, thrive, and drive positive change in their communities.