Happy New Year, and welcome to 2023! This episode provides our Top 5 trends that we think you should be thinking about and how they might impact your business.
1. Stabilization of economic conditions
2. Investors and buyers are in the wings
3. New business start-ups will remain high
4. Consumer confidence will increase slowly
5. Staffing will remain challenging
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Tom DuFore, Big Sky Franchise Team (00:01):
Welcome to the Multiply Your Success podcast, where each week we help growth-minded entrepreneurs and franchise leaders take the next step in their expansion journey. I’m your host, Tom DuFore, CEO of Big Sky Franchise Team, and Happy New Year and welcome to 2023. And just to let you all know as we go into 2023, we have a huge, awesome lineup for you coming this year for our podcast for Multiply Your Success. Some amazing guests, some great leaders, great authors and industry experts you’re going to love. So make sure you start tuning in. If you’ve been away for a little while, we’re looking forward to having you back as a regular listener. I hope you have enjoyed your holiday and that you are looking forward to 2023. And might I add, just as you are looking forward and looking ahead to the new year and the new beginning in front of us, that you also take a moment to pause and reflect on what happened throughout the previous year of 2022. Reflection is such a critical part.
Tom DuFore, Big Sky Franchise Team (01:09):
And as such, part of my reflection was thinking about the trends and things that happened last year and how I think that may impact what’s going to happen this year. So in this episode, we’re going to go through the five things, the five business trends and things that I think will be impacting or be likely to have the biggest impact on your business in the coming year. So we are going to talk through the stabilization to economic conditions, investors and buyers being in the wings, new business startups, consumer confidence and staffing remaining as a challenge. I’m going to talk through those five here over the course of the next few minutes.
Tom DuFore, Big Sky Franchise Team (01:54):
So the first thing on our agenda to discuss is the stabilization to economic conditions. And this is something that I see slowly starting to happen and really it’s going to be a long, slow journey over 2023. At least this is my opinion. And I see that interest rates are going to start to stabilize and it will allow for the economy to finally just regain its footing and start to smooth out these wrinkles and road bumps and issues that these fast rising interest rates have created. Another part of that is I think that supply chain issues as part of this stabilization, supply chain issues will continue to become less of a challenge and those problems will become less and less, and not only fewer but less severe as well.
Tom DuFore, Big Sky Franchise Team (02:43):
Another stabilizer to contribute is that Congress is now going to be split and divided over the course of the next two years between the two major parties. And so generally when Congress is split, that means things in Washington slow down and so legislation becomes more difficult to pass, which from a business standpoint tends to be a good thing because it keeps the conditions as they are for a while so that you can have some relative confidence at least short-term for the next couple of years that things are going to remain relatively stable.
Tom DuFore, Big Sky Franchise Team (03:19):
I also like to point out that economic indicators are going to remain mixed. So we’ll have some positive indicators and some negative indicators. So for example, we have the PMI Purchasing Managers Index for manufacturing is currently reading, showing a negative reading, or we can take a look at the other indicators that are showing positive readings. And so my opinion is that this is just going to be these mixed levels and we may or may not go into a recession. My opinion is that even if we do, it’s going to be relatively mild, and if we don’t, it will trend kind of right on that buffer line, that the economy is just going to kind of stay relatively flat here. It’s not going to really grow, it’s not going to really contract. It’s just going to kind of stay where it is. So that’s just my opinion.
Tom DuFore, Big Sky Franchise Team (04:15):
The second piece I’d want to talk about is about investors and buyers being in the wings. So investors, private equity groups, they are waiting in the wings for discounts. They’re seeing these corrupt, potentially troubled or uncertain economic times that are coming and they are looking for deals or opportunities to pounce on. And what I think is what’s most likely is that there are investors and other buyers looking to buy things that are of great opportunity. The deals and discounts, there just aren’t that many of those. So what they’re going to be looking for is where can I invest my money or make an acquisition? That’s a huge opportunity for me, is what they’ll be thinking.
Tom DuFore, Big Sky Franchise Team (05:01):
So I’d like to just point out to you that this is a great opportunity for you to be thinking about franchising or maybe finding an investor either to buy a franchise in your franchise system or number two, is that these investors will be looking to maybe acquire or invest in, acquire a portion of your business. So just be mindful of that. If your business is doing well, now could be a great time to find potential investor into your company.
Tom DuFore, Big Sky Franchise Team (05:32):
Number three on my list is that new startups will remain high. And this has been a trend that’s been going on for over two years now, two and a half years almost, that it’s been going where new business startups, according to the US Census Bureau, have been right around or over 400,000 new startups per month. And just by comparison, pre-COVID numbers, it was bubbling right around 300,000 per month. So that that’s about over a third, 33% increase from that time period. And I don’t see that changing. And so that bodes well for you in terms of if you’re franchising or thinking of franchising, lots of new potential business owners coming into the market. The downside of that is that, well, with new business, with new startups, that also means more competition for you at your local business. So keep in mind, you may have those new startup competitors coming into your market.
Tom DuFore, Big Sky Franchise Team (06:36):
Number four on our list is that consumer confidence will increase. It’s been at a very low number, and I thought about including this into the stabilizing and stabilization of economic conditions. But I think that consumer confidence, I wanted to itemize that out and keep that as a own separate component to our list here because I think consumer confidence will slowly start increasing. It’s going to be a slow, this slow burn is … I’ve heard that phrase used before, and it’s going to be the slow and steady increase over the course of the next 12 months. And we may see a dip a little bit, but overall, the trend’s going to be this slow increase and an increase in consumer confidence is a good thing for all of us in business.
Tom DuFore, Big Sky Franchise Team (07:26):
And the final piece I want to talk about is staffing and that staffing will remain challenging. Now, this was on my list last year, but I still think it’s noteworthy to review and talk about again. So I mentioned about the new business startups. Well all of these startups, they’re going to be hiring people, which means increased companies looking to find great people. Most likely the single greatest contributor to the staffing challenge right now is the labor participation rate is still several million people short in terms of participating in the economy then from pre-COVID numbers. So 2020 prior to, in the 2019 numbers, were still, I believe it’s two or three million people short for labor participation. And so ultimately that means that this is going to be a great market if you’re willing to work and willing to show up as an employee. This is an employee’s market right now, and that generally is going to lead to higher wages, better benefits, maybe more hybrid-type work environments that are going to be created as part of that opportunity.
Tom DuFore, Big Sky Franchise Team (08:40):
So those are the top five for us, the top five trends that I see and that I think will be most likely to impact your business in the coming year. And so I hope that you all have a great, great, great, wonderful, happy, joyful, peaceful, and prosperous new year. I genuinely wish that for you and hope that you continue to have much success into 2023. And so that’s the episode today folks. Please make sure you subscribe to the podcast and give us a review. And remember, if you or anyone might be ready to franchise your business or take their franchise company to the next level, please connect with us at bigskyfranchiseteam.com. Thanks for tuning in. We look forward to having you back next week.