SMBs that use their “Superpower” will excel in 2024

Unlike a few years ago, small businesses are in a position to compete with larger corporations. Thanks to technologies such as expanded access to cloud-based solutions, they can efficiently scale their operations and enable their cybersecurity, much like their larger counterparts. To take full advantage of this shift towards equality, small businesses must adopt strategic approaches that pay close attention to market trends and economic indicators.

Small and midsize businesses (SMBs) that keep these in mind as they plan for the upcoming year will put themselves in positions to succeed.

Invest in technology

SMBs have been prioritizing technology investments since the economic shutdown. According to the State of Small Business Survey, in 2020, more than a quarter (27%) of small and midsize companies upgraded their internet connection bandwidth. This investment continued to gain momentum after the economy reopened, with 52%, 51%, and 53% of SMBs upgrading in 2021, 2022, and 2023, respectively. There’s a growing proportion of new businesses that are digitally native, indicating a rising demand for increased capacity. To remain competitive in the future, SMBs must continue investing in their digital infrastructure.

Look for software that solves multiple problems at once

Software as a Service (SaaS) has exploded in the last few years, becoming an integral part of SMB tech stacks. In many ways, the rise of SaaS has been a boon for SMBs, but managing a glut of SaaS providers has started to become increasingly challenging. In order to cut down on costs, increase productivity and streamline operations, more small businesses will look to consolidate their SaaS providers, favoring partners that can offer multiple solutions on one platform. This shift also encourages a more consultative approach, which many SMBs prefer.

Focus on a great adoption of AI

Artificial Intelligence (AI) stepped squarely into the spotlight over the past year, largely thanks to the rise of its latest poster child, ChatGPT. Many companies, including Verizon, have been utilizing AI for years, but it was generative AI that captured the imagination of the general public. This development could tempt some into investing in generative AI – which can be useful if utilized strategically  – and others into assuming AI is nothing but a fad. But AI isn’t a fad. It boasts ample utility in various forms, from enhancing customer service to optimizing staff productivity. As the novelty of generative AI wears off, companies will phase out the trial period and begin exploring other AI use cases.

Take advantage of the SMB superpower

SMBs have a unique advantage over large companies: agility. Unfortunately, many small businesses are too risk-averse to exert that advantage. While small businesses may lack the vast resources of larger counterparts, they have the ability to pivot quickly. They’re able to test strategies and solutions, using insights gained to make informed adjustments along the way. It’s ok to be cautious, especially given the topsy-turvy economy of the last few years, but not when it prevents businesses from dispassionately assessing a technology or solution that can benefit them. Many small businesses are still skeptical of AI, for instance, with 43% of small business owners fearing the technology would expose them to cybersecurity risk. The reality, however, is that their greatest cybersecurity risk is a lack of investment despite their increasing digitalization.

One thing is certain: the digitalization of SMBs will only escalate in 2024. Small businesses must invest in digital infrastructure to remain competitive. But not all digital infrastructure is created equal, just as not all AI or SaaS configurations are created equal. Be prescriptive in your approach, while also maintaining the agility to change on the fly which SMBs have the unique ability to do.