As a new year dawns, optimism among entrepreneurs, business owners and hopeful startups is rising, too. After a tumultuous couple of years following the onset of the COVID-19 pandemic, small businesses in the U.S. have adapted to their new normal and are busy preparing for their next normal. If many of these small business predictions come to pass, 2022 will mark a banner year for business, both in recovery and in new growth.
But it hasn't come easy. In the past 12 months, small business owners report economic instabilities, along with hiring woes and supply chain disruptions as major hurdles they've had to leap.
This data reflects the findings in Incfile's Small Business Survey in Q4 of 2021. Incfile customers overwhelmingly felt the pinch from rising costs and supply chain interruptions that stifled many businesses throughout the past year.
However, the news wasn't all bad for our customers and for the small business landscape as a whole. Let's explore what lies ahead for small businesses in 2022 and how you can prepare for these changes and seize new opportunities to grow your business.
Prediction #1: Hiring Will Explode in 2022
This last year has been called "The Great Resignation," as many businesses struggle to keep their staff at full capacity, and a greater awareness of employee rights places more demand on employers.
In our survey, 45 percent of small business owners reported they were not adversely affected by the national labor shortage, and overall, the data across all small businesses is much the same. It seems the tide has shifted, and hiring is once again on the rise.
As workers continue to resign from larger corporations, they will likely be looking for something different, and small businesses could reap the rewards. In fact, experts predict that 2022 will break records in terms of hiring among small and micro-businesses.
Ecommerce sales skyrocketed during the pandemic, peaking at 22 percent of all retail sales in the U.S. amidst some of the country's bleakest days. It also marked a shift in the way consumers shop, as they proved over and over again their willingness to purchase online.
That small business trend will continue in 2022, with online sales reported as the number one priority for small businesses in the U.S.
The results in our previously cited survey were much the same, with marketing winning out for the top spot in 2022 priorities — a vital part of any ecommerce model. If you're wondering how to start, begin researching ecommerce business models to find the fit that's right for you.
Prediction #3: New Tech and Remote Tool Adoption Becomes Increasingly Important
The last two years have brought about the Great Remote Revolution, forcing businesses to pivot to a largely work-from-home model at the height of the pandemic. As our Q3 Small Business Survey shows, many small businesses were already preparing for the digital shift, and most plan to continue into the foreseeable future.
However, with a more remote workforce comes more evolving technology, and business owners will need to stay on top of new innovations to operate at maximum efficiency.
Cloud-based software or SaaS (software as a service) will continue to dominate throughout 2022, as owners make the shift to these services to help track time, manage projects and perform daily business operations.
Prediction #4: Cash Was King, But It's Been Dethroned
With a virus easily transmitted through contact and a nationwide coin and dollar bill shortage, cash transactions have dwindled drastically over the last few years. Some businesses have gone entirely cash-free, while others were unable to dispense change for cash purchases. It's not, however, entirely related to the pandemic; the decline of cash has been happening for years in countries around the world.
It isn't likely that cash will go the way of the dinosaur in the U.S., but business owners can expect to see a rise in cashless transactions. With the growing popularity of secure pay apps like PayPal, Apple Pay and Google Pay, owners who offer alternative payment methods may become more appealing to a wider expanse of consumers. Need tips on how to operate a cashless or cashless-first business? We've got all the support and info you need.
Prediction #5: The Tourism and Entertainment Industries will Rebound in a Big Way
Amidst lockdowns and quarantines, travel, tourism and entertainment arguably took the biggest hit than any other sector during the pandemic. Now that borders are opening and more is known about how to prevent spread of the virus, business owners can expect consumers to be looking to get out into the world. Vacation planning is back in full swing, with more consumers looking for Airbnbs and other alternate accommodations.
At the same time, more people are feeling safer eating in restaurants, and more movies are back to releasing in the theatre rather than exclusively on streaming networks.
In 2022, accommodation, food and retail will see the biggest growth. If you already own a business in these industries or are considering starting one, it's important to remember that consumers are savvier than ever. They'll want to see that you have COVID-19 protocols in place and will likely want to be made aware of your cleaning, health and safety standards.
Prediction #6: Taxes Won't Get Any Easier
We can almost hear the collective groan. But after the hassle and uncertainty that came along with PPP loans and government assistance in 2020 and 2021, we're still not over the hump. This year's tax filing will take into account any federal assistance granted in 2021, so you'll need to start preparing early.
Additionally, a new tax rule requires that all third-party payment services report all payments to the IRS. What does this mean for you? It means if your business has received a payment through one of these services, you'll need to make sure it's reported on your taxes or face penalties and fees. Most of the time, these are payments that should be reported anyway, but sometimes smaller payments are easy to forget. Getting the right support and tools in place to manage your business's accounting and bookkeeping is the best way to avoid any issues.
Bottom Line: 2022 Will Be the Year of the Small Business
Small business is back in business! It's been a long, hard road to get here, but all the data and reports thus far are optimistic that 2022 will be a fantastic year for the small business sector.
If you've resolved to make this the year you start your own small business, Incfile is here to get you off on the right foot. Our Start a Business Guide gives you all the steps you need to take to launch the business you've been dreaming about and grow it into a success.
Wendi is a freelance writer based in Indianapolis, IN, with over a decade of experience writing for a variety of industries from healthcare to manufacturing to nonprofit. When she isn't working on solutions for her clients, she can be found spending time with her kids and husband, working in the garden or doing more writing (of the fiction variety).