Small Business Growth Potential in 2024

Well, you started from scratch, built an exciting business, and you’re now plunging into a new year and looking to capitalize on its potential. You know much more now, of course. After all, you’ve led your company through the shocking impacts of COVID, the associated economic shutdown, the supply chain debacle, the inflation nightmare, and more. Now here you are in the middle of the tenaciously slow national recovery. There are many encouraging indicators of a growth-conducive 2024, but it’s arguably somewhat of a mixed bag. So, how are you supposed to figure out your quarterly planning for the coming year?

The current data and recommendations below are from the United States’ most experienced predictors of business growth potential. Use this report as your starting point for understanding the general conditions you will operate in this year.

Primary Indicators of 2024 Small Business Growth Potential

To determine how things are stacked in favor of growth, or not, as you head into Q1 2024 ask a couple of big questions: 1) Have you got all the internal adaptations you need underway to be maximally competitive going forward? 2) What do you need to know about the broader external conditions in which you are embarking on your short- and long-term future planning or real-time adjustments to it in January?

Let’s take the last question first and then deal with the first. So, what can you expect your small portable restroom rental service business to face in the 2024 national economy and the consumer and employment markets? Well, economists agree on at least one thing — that the condition of the economy is the clearest indicator of the state of growth potential for businesses during any period.

Therefore, low interest and inflation rates, a robust labor market, manageable fuel costs, conducive environmental, political, and social conditions, and other factors matter. Naturally, your target consumer demand is the driver, but that number is ultimately dependent on those combined economic elements just mentioned.

Key indicators of a strong or weak economy include high or low rates of unemployment, credit costs, the inflation rate, and other factors that trigger shifts in the consumer confidence index. These contribute to a healthy or ailing Gross Domestic Product (GDP).

In the broadest historical terms, with the exception of unpredictable events like natural disasters, pandemics, etc., positive and negative states of the US economy have been roughly cyclical. Per University of Minnesota research, some economic cycles have been longer than others, but normally they’re around 3.5 years.

The pattern continues to play out — prosperity, recession or depression, and then recovery. Or, more specifically, GDP wanes, unemployment goes up, consumer spending goes down and business revenues go down with it. That sustained drop in demand marks the onset of a recession, or in severe cases, a depression. Then, a recovery phase predictably emerges at some point.

External Economic Conditions in 2024

By all accounts from leading experts, the U.S. economic forecast improved throughout 2023. But the consensus is also that this does not necessarily ensure that 2024 will be a strong growth year for the national economy or for individual businesses in various industries. The Federal Reserve has predicted that growth of the US GDP will slow to around 1.5% in 2024. On the upside, the experts remind us that that rate indicates that the economy is still expected to remain on an upward (growth) trajectory this year, albeit in a slower climb.

Experts point out that the US labor market is demonstrating impressive resiliency, reflected in the currently low 3.8% unemployment rate. The government is projecting a rate of just 4.1% through this year, which is well below the more common national average of around 5.7%.

In the meantime, the nation’s economy is projected to grow slower than the 2.4% rate in 2023, but still at the 1.5% mentioned above. Again, the message around this currently much-published pair of statistics saturating all the financial news services is that slower growth still equals growth.

Will Inflation Rise or Fall in 2024?

Economists are emphasizing that the risk of inflation rising again is a threat to growth in 2024. On the other hand, they note that the consumer price index of 3.1 is now far below the 9.1 record set in 2022. However, the Fed’s goal for this metric is just 2%. This is reportedly one of the top concerns small business owners have expressed. Federal Reserve Chairman Jerome Powell has driven home the point that price increases are still a serious concern heading into 2024, despite improving inflation rates, and he warns that solutions are unclear.

Wells Fargo economists have concurred that the Fed’s strategy of increasing interest rates to help control inflation is not yet a definitive success so, at this point, their experts say the jury is still out on whether the economy is still at risk of recession or not.

Will the Fed Hike Interest Rates Again this Year?

The tactical interest rate increases through 2023 do appear to have mitigated the runaway inflation and possibly helped prevent a recession. In December, the Fed indicated that three interest rate reductions might be made this year (2024). Other positive financial news includes the almost record-high on the S&P 500 and the good showing across the less-recognized Vix Index, known in financial circles as Wall Street’s “fear gauge.” And sustained robust consumer spending has surprised economists, though consumers dichotomously continue to express pessimism about the current state of the economy.

As Inc. magazine has observed, these optimistic assessments by economists and business leaders are a 180-degree reversal from the start of 2023. At that time, the most recognized economists in the government and academia were expressly expecting a recession. However, that did not happen and here we are just a year later anticipating modest continued growth through 2024.

What About Credit Market Problems in 2024?

Last year credit conditions became increasingly tighter to the extent that by the third quarter, many banks had put stricter lending standards in place, thwarting the best laid plans of businesses with under $50 million in yearly revenues. Only 13% of loans for small businesses were approved by large banks during the period! The Federal Reserve has commented that that problem will likely persist through this year.

How Long Will Worker Shortages Continue?

Last year the national economy grew more than 5% by the third quarter and was expected to grow another percent by the end of the year. Still, the US Chamber of Commerce predicted economic growth throughout mid-2024, which is far below performance in the same periods last year. But, the Chamber specialists suggest that worker shortages will have a limiting effect on slowing the economy due to the very high number of unfilled job openings in contrast to the number of unemployed workers. Additionally, the agency’s experts point out that wages have strongly increased and can be expected to keep going up as employment market demand stays high this year.

Do Wall Street Indicators Reflect on Main Street?

It’s been suggested that stock market indicators are not necessarily aligned with consumer behavior in any given period. In any case, Wall Street weighs in with optimistic projections that the US economy will realize a “soft landing,” i.e., short of the previously predicted recession, from the ups and downs of 2023 and the broader recovery from the 2021 shutdown. The bright outlook is credited with boosting positive activity in all areas of stock trading.

Do Global Economic Indicators Matter?

From the global economic vantage point, the International Monetary Fund offers its international growth projections for 2024. The agency predicts that the world economy will slow from 3% last year to 2.9% this year. That rate is under the average of 3.8% for the past two decades.

The agency predicts that countries with advanced economies will see growth slowing to 1.4% in 2024, which aligns closely with US domestic experts’ predictions. The IMF cites more restrictive policies as a partial cause of the expected slowdown. Economies in developing nations are expected to drop slightly to 4% growth in 2024 (from 4.1% in 2021). The agency has suggested that global inflation may decline to its target rates by 2025.

Changes Coming to the Business Sector in 2024

It’s important to include these factors into your strategic planning for 2024 whether you are looking to scale your operations this year or later.

Concentration on a niche market, consistently delivering exceptional customer service, and personalizing offerings and service is key to remaining relevant and growing.
Customers are taking more control over their “journeys” with vendors. Helping them gain greater control of their relationship with your company will help your business succeed.
Competition will probably increase, including from online businesses that are not limited by geographic boundaries or even state or national borders.

The Role of Technology in 2024 Business Growth

Throughout the business sector, including across the small business subsector, the use of Artificial Intelligence (AI), is expected to expand quickly this year. Especially for marketing, sales, customer service, HR, logistics, and automating various tracking and maintenance processes.

Portable restroom rental businesses will discover many time-saving, error-saving uses for the transformative technology. These benefits translate into increased service quality, general efficiency, revenues, profits, and growth.

AR and VR technologies will further give customers a more immersive and confidence-building experience in the unit rental and service processes.

What Do Small Business Owners Think About 2024?

Insights from Verizon reflect the economic concerns of small business owners they’ve surveyed. An overwhelming 90% of their respondents who own small to midsize businesses said they are currently worried about the national economy. However, 54% also said they anticipate that their businesses will do better or much better in 2024.

They’re worried by the external economic indicators but optimistic about their own companies’ futures because they’re doing what it takes to help minimize the effects of inflation on their profit margins. For example:

59% are raising all or some of their prices.
57% are cutting unnecessary spending.
35% are investing in employee retention to avoid hiring costs.
39% are using free resources to cut costs.
37% are stockpiling inventory at lower costs for future months.

More Recommendations for SMB Growth in 2024

In addition to applying the lessons from the section above, other suggestions for small business managers this year include, for example:

Build an effective online presence with an optimized site, social media activities, perhaps a mobile app, or any other means your customers will use to work more smoothly with your team.
As the digital take-over continues, keep up by increasing your company’s digital skills, especially in marketing, sales, web analytics, and customer service.
Continue with remote work and hybrid work arrangements for as many employees as possible to:
- Provide expanded service hours.
- Eliminate geographical limitations.
- Benefit employees with maximum flexibility.
- Cut overhead expenses.
- Increase your team’s problem-solving agility.
- Make your businesses more rapidly adaptable to change.
Foster a workplace ethos of company values over profit. This should not sound counterintuitive. As good members of society, we are all supposed to be doing this. Customers are emphasizing brand ethics and commitment to sustainability as consumers more firmly opt to work with morally conscious business teams.

SBA Resources to Help You Reach Your 2024 Goals

The SBA office in your town is an important resource for information and guidance. Looking to 2024 and its potential for SMB growth, the agency emphasizes:

Build active listening and other interpersonal communication abilities. These are critical soft skills for growing a small business in today’s option-packed consumer market.
91% of small business owners who use AI for marketing report that it has increased their companies’ success. So, take this tech seriously and add it where you can to boost efficiency.
78% of consumers prefer to buy from a company that shares their values. Consumers are signaling that it’s time to prioritize making businesses beacons of values in the community.
Cybersecurity is a priority for securing customers’ personal information and protecting your business’s future.

Collective 2024 Growth Outlook – What Does it All Mean?

According to the US Treasury Department statement issued In October 2023, economic growth in the country remains strong. Labor markets have recovered to new record high levels of participation for the years after the pandemic. Strong GDP growth was generated by household spending and businesses building inventories in Q3 and Q4 2023. That outcome is encouraging to business owners planning for 2024. Inflation is still trending lower, and other indicators mentioned above are aligned in the positive column of pros and cons for pursuing growth this year.

While GDP growth is predicted to slow down to around 1-1.5% through this year, the US Treasury Department has offered the perspective that that could indicate a more appropriate balance of supply and demand and reduce pressure on inflation. Such an outcome, by the Treasury experts’ reasoning, would mean that pricing increases by businesses working on growth could be achieved without causing undue risk to the overall economy.

Of course, The US Chamber of Commerce cautions that small business owners should take insights and inspiration from recognized economic experts but should seek advice from professionals familiar with your business before making any significant financial decisions.

The takeaway for business owners hoping to invest in growth during 2024 is to proceed with caution. Control your budget. Protect your business from excessive staff turnover. Obtain the technologies and skills you need to stay competitive. Prioritize instilling your personal values in your team, and take other measures mentioned above to optimize your competitive position in your market as you work on growth this year and beyond.