Every year, I predict what will happen in small business. In 2023, I got things pretty wrong in my top economic predictions. Overall I was at about 50% in all predictions which is not smart.  I think the economy’s resilience surprised a lot of people in 2023. Here is what I said was going to happen in 2023:

The stock market will rise by 5% but still be below its 2021 level as the Fed reduces its rate increases.

Miss: Stock market rose about 15% and many indices were near their record highs.

Inflation will remain at about 5% as the war in Ukraine rages on keeping energy prices high.

Miss: Inflation in 2023 was 3.1% and is coming down.

GDP will shrink two consecutive quarters signaling a recession.

Miss: GDP grew between 2.1- 4.9%. It did not shrink in any quarter.

The unemployment rate will rise.

Miss: The unemployment rate is 3.7% and has edged down.

Other predictions:

Small business will struggle with the cost of online paid advertising as economics no longer work. They will rely increasingly on SEO.

Hit: Most of my clients are focusing on SEO instead of relying all on SEM.

Elon Musk will send Twitter into bankruptcy. Small businesses will continue to look for other social media channels.

Miss. While Twitter is not bankrupt, it has lost a lot of advertisers, and its value has shrunk substantially.

The “Meta-verse” for most small business customers still is not “a thing”.

Hit. Still not a thing.

Tech companies will continue to see low valuations and be difficult to sell for cash only . Main street home services businesses with steady cash flow will increase in value. The focus will not be on fast growing businesses but profitable ones.

Hit: Series A valuations shrunk by 20% and Series B by 50%. Main street businesses were selling for 5X cash flow.

The crypto winter continues. If you want to get in at the bottom, now is the time.

Hit: FTX, Binance…do I need to say more?

Employee lawsuits will continue to rise as a way to get money from small businesses post-employment.

Hit: Most of my clients are spending $50K to $250K a year to settle lawsuits for employees that were fired.

Here are my 2024 Small Business Predictions:

  1. The stock market will rise by 8% as the Federal reserve begins to cut rates.
  2. GDP will continue to grow by 3%.
  3. Inflation will run at 2% a year.
  4. Unemployment will remain flat. Small business owners will still struggle to hire and retain the best talent.
  5. Valuations for companies will improve slightly from 2023 with the rise of the stock market, new IPOs, lower interest rates and a lot of venture capital with “dry powder”.
  6. Lean Startups: The trend will continue in delaying hiring full time staff and relying on outside vendors and freelancers.
  7. AI, AI, AI: video, pictures and written content. If you are not using this in your business, you need to!
  8. Remote work is here to stay. Every information worker will spend at least 1-2 days a week working from home.
  9. Simultaneously, productivity will be under a microscope. Business owners will ask if team members are just as productive working from home.
  10. Creative financing will still be a mainstay for small business owners: credit cards, fintech short term loans, cash advances and factoring as bank lending is still difficult.

What do you predict for 2024?