Before we disappear into the Christmas mega-holiday, I want to prime business owners on specific challenges and opportunities in 2024.
New federal laws and regulations await. Expect additional administrative burdens.
We know that every new year comes with new federal statutes and regulations that affect how we do business. Regulations are additional burdens, but, in the best cases, they do not profoundly affect the success or failure of your business. But there are business challenges in 2024 that promise painful repercussions if ignored.
For example, The Corporate Transparency Act will go into effect on the first day of January 2024. Around 25 to 35 million different companies in the United States—most of which are small and medium partnerships, LLCs, and S-corporations—will have to file a report addressed to the Financial Crimes Enforcement Network. Nobody is in trouble. It’s simply another burden. Expect more.
If you run a business in the United States, here’s what you need to know. Your business is responsible for filing a report; noncompliance can carry civil and criminal penalties.
Let’s relax, though. It should be standard practice for at least one individual in your business to be responsible for keeping abreast of federal laws, business regulations, and tax regulations.
Compliance is always a challenge, and it’s never negotiable. You need help.
Where are the employees? Is remote work dead? 2024 is the year we find out.
We’ve all watched the shift from in-office to remote work, from remote to hybrid work. It’s been a rollercoaster. Will that rollercoaster ride continue to thrill into 2024?
If you think your business is immune to these shifts, look at the numbers.
In a Nationwide Gallup poll, less than 6% of full-time remote workers expressed interest in returning to the office. Fortune 500 companies led the way in forgoing employee preferences and investigating whether remote work was working. Now, both large and midsize companies are recalling remote workers, and in my experience, the transition back will be bumpy.
Proactively investigate ways to adapt your processes, operations, and relationships with third parties to accommodate the growth of hybrid work and expect a new class of young professionals who need to be actively pursued by a company to consider employment there.
Yes, it’s time to revamp your business to employee marketing (B2E). If your HR department is understaffed and poorly managed, now is the time to make the change because 2024 may be defined by the scarcity of qualified employees.
Speaking of hybrid work, let’s get our technology squared away, folks. Invest in a webcam from this century. It makes for a great first impression.
E-commerce strategy decides who wins—even for services.
Forecasters predicted the downfall of brick-and-mortar businesses years ago. Here they stand. To me, it looks like we have a particular set of people in a particularly narrow geographical area who simply do not see brick-and-mortar businesses as major brands.
E-commerce sales accounted for approximately 20% of total retail purchases in 2022², an increase over the previous year. A similar increase in online sales occurred in 2023 and is virtually guaranteed to carry on at a faster pace through 2024. Brick-and-mortars should take note of these numbers, though there is no reason to be alarmed.
Demand for in-store shopping will carry on as long as they focus on the retail experience (a weakness of online shopping) and shift toward cultivating loyal, high-value customers.
Professional services, e.g., accounting and law firms, would be wise to apply lessons learned in e-commerce and optimize appointment and payment pages for ease of use and comfort.
A checkout page is a checkout page, plain and simple. Watch out for more sophisticated e-commerce and web design this year. Why?
E-commerce offers a direct line to customers who are invested in your product or service. You want those customers. However, regional, local, and familial relationships are not to be discounted as sources of referrals and business.
Keep a strong presence in the community and continue to mine for prospects locally. A prospect that comes via referral makes for an easy close, and the cost of acquisition is lower. Shop-and-see online prospects are a different species, and you’ll need to create an inbound marketing funnel to even get a shot. I want you to do both.
Successful businesses will be local and global.
Is it a contradiction? I thought so, too, at first. It just means working harder to thrive in 2024.
Here’s the first challenge, and it’s the problem I built this business to solve: The name “Small business” has become self-fulfilling. Being small does not mean thinking small. Shakespeare said as much: “What’s in a name? That which we call a rose by any other name would smell just as sweet.” So, you can have four employees and still do business on three continents. Small, but ever so sweet.
Small businesses, even those that intend to stay relatively small, will have to pursue enterprise-level processes and adopt a similar mentality if we want to see our communities win globally. So, the local and global issue may seem remote, but it’s certainly among the most interesting business problems this year and for many years to come.
New York Times columnist Thomas Friedman wrote his famous essay, “The World is Flat, ” over a decade ago. The title says it all. Business can be transacted instantaneously—over the horizon, regardless of time.
Small businesses need to think globally. Maybe Friedman’s utopian vision of a universally connected and tranquil globe missed the mark. But businesses can do the work. We have access to the tools and the knowledge to grow our bottom line by following the same global mindset as enterprise firms.
Just start thinking about it. That’s all I’m asking.
Businesses need balanced perspectives on Generative AI.
Artificial intelligence has already changed the way you and I are doing business. It represents a profound opportunity to increase efficiency and deliver higher-quality products.⁴ As small business owners, you need to consider the role that artificial intelligence may play in your business or industry in a judicious manner. It must be taken seriously, but we are talking about a technology that is transforming into a buzzword.
AI is neither a shortcut to effective management nor a substitute for carefully crafted messaging. Just take care and stay sharp, even if you use an assistive tool 85% of the time.
AI is imperative, but so are high-performing people.
I’m asking you to do two things at the same time.
- Aggressively pursue the application of AI technology toward specific, limited, and reasonable objectives. Remember that we are not talking about computers with brains.
- People set the tasks and the conditions for success. If the tail wags the dog, then the money is going places it shouldn’t be based on false pretenses. For 2024, look to create a culture that is open and enthusiastic to possibilities of computer intelligence and nip any “throw AI at it” thinking in the bud.
Looking to start an initiative with AI as a component?⁴ Choose an AI user rather than an AI acolyte. You’ll find that intelligent people support AI, while the uninformed folks believe in it. Creating coherent and precise policies regarding the use of AI will be among the most significant business challenges in 2024.
Leaders will face uncertainty.
Uncertainty is inevitable, and 2024 will be a year of preparation for the unknown. So, “how do we respond to uncertainty” may prove to be one of the more vexing leadership, managerial, and overall business challenges in 2024.
We must acknowledge that global events have the potential to influence how we do business in the United States and our communities.
I’ll refrain from reciting stories about dismembered supply chains and the general absence of basic necessities, from prescription drugs to instructional materials. That’s anecdotal.
Here’s what we do know. I’ll save some space by saying the opposite of what is true.
Do you agree with the statement: “The political, economic, and labor situation in the United States is reasonably stable, adequately predictable, and likely to resolve within the next two years”?
You answered no. As we come to the new year, I recommend meeting with partners or senior team members to discuss practical and reasonable areas of concern and possible solutions to upcoming business challenges in 2024.
Enter the new year with strong financials.
I’m here for all things tax and accounting; this firm knows what it’s doing. Start with us in 2024, and it will be a good year.
Talk soon,
Jeremy A. Johnson, CPA
References
- Agrawal, Ben Wigert and Sangeeta. “Returning to the Office: The Current, Preferred and Future State of Remote Work.” Gallup.com, July 21, 2023. https://www.gallup.com/workplace/397751/returning-office-current-preferred-future-state-re
- Baluch, A. (2023, March 10). 38 e-commerce statistics of 2023. Forbes. https://www.forbes.com/advisor/business/ecommerce-statistics/#sources_section
- Blackman, James. “BMW Tests 5G Positioning with Vodafone and Nokia at Leipzig Factory.” RCR Wireless, October 22, 2022. https://www.rcrwireless.com/20221031/5g/bmw-tests-5g-positioning-with-vodafone-and-nokia-at-leipzig-factory.
- Baxter, Michael. “5G and AI Use Cases – HOW 5G Lifts Artificial Intelligence.” Information Age, December 1, 2022. https://www.information-age.com/5g-and-ai-use-cases-how-5g-lifts-artificial-intelligence-19985/.