Top business trends and where they came from
Small businesses are keen to lift productivity, connect with customers and look after their wellbeing. These small business trends are based on research across the US, Canada, the UK, Singapore, Australia and New Zealand.
Business trends 2024
Business trend 1
Building better workdays in 2024
Given ongoing economic and supply-chain challenges, it’s perhaps not surprising that business owners in the US, Canada, the UK, Australia and New Zealand report lower levels of life satisfaction than the general population.
Nevertheless, a Xero survey of 4600 small business owners in these countries found that three-quarters of owners remain fulfilled by their business. And the study may also have uncovered a way to help address the dip in wellbeing.
Survey respondents who described their workdays as interesting were significantly more likely to score higher for their sense of general wellbeing.
This may be just the nudge entrepreneurs need to get mindful about their workday in 2024. Some ideas include:
- auditing their week to see where they’re spending their time
- ensuring they stay close to tasks they love
- stepping back from low-value tasks that may be sapping their energy
- looking for opportunities to outsource or automate distracting or unfulfilling jobs
Some businesses are already taking these steps. In a separate survey, more than 16% of small businesses in Australia, New Zealand and Singapore say they’ve started outsourcing payments and collections – a job that has traditionally caused angst for small business owners.
Business trend 2
Productivity under the spotlight
Productivity measures how good businesses are at turning their inputs into revenue and perhaps the most common ratio is revenue earned per hour worked.
This is a key stat for businesses that want to grow in tight employment markets, as they have to try and make more goods and services with the same number of staff. Productivity has also long been associated with business resilience, which was confirmed by a 2021 study which found that highly productive businesses were more likely to expand during the pandemic recession of 2020.
At this point in time, little is known specifically about small business productivity and what data there is can be several years old. However, a 2023 OECD report notes that small business productivity generally lags behind big business – with some exceptions when they make “intensive use of technologies, digital tools and innovations.”
To dig deeper into the opportunities for productivity growth, Xero is conducting a world-first study of small business productivity. The report will be out in 2024 – with new insights on how small businesses can dial up their productivity and unlock the many benefits that come with it.
Business trend 3
Rethinking brand loyalty in ecommerce
Small online retailers may need a new brand playbook as they fall behind big players in the race for customer loyalty.
A recent North American survey discovered that 27% of consumers feel more loyal to big retailers, while only 14% prefer small businesses. This flips the script we’re used to seeing, where consumers generally feel loyal and proud to use local small businesses (Forester, 2020). That sense of localness is somewhat lost in the online world, where factors like pricing and convenience may be coming to the fore.
However the report notes there’s still room for small businesses to leverage their business next-door charm. But because the customer relationship is now remote, small businesses will need to get more creative by:
- weaving their brand message and passion into their website and product descriptions
- packaging goods in a distinctive way that reinforces the brand story and values
- including special touches with shipments, such as personalised notes
While the study confirmed that consumers like free delivery (a quarter think every purchase should ship for free), the report noted some of the cost can be absorbed into their pricing.
Business trend 4
Easing into AI
Talking about AI was definitely one of the defining trends of 2023, and actually working with the technology may be a business trend of 2024.
Lots of businesses already use AI, of course, in the form of digital tools like Xero’s bank reconciliation feature, which uses the technology to suggest matches between ledger items and bank statements.
But businesses have been less sure of how to use generative AI, as popularised by the likes of ChatGPT.
Business owners remain concerned that the tech is outpacing regulation. Chief among their worries are things like data security, hallucination (the technology’s tendency to fabricate untrue facts) and plagiarism. How is a business supposed to embed a tool that introduces those sorts of risks to their operation?
'With care' is the obvious answer. But even accounting for the effort required to check and validate AI’s work, efficiency and productivity gains are still on the table. As advertising guru, David Ogilvy famously said – a lousy writer can still be a good editor. And generative AI can make a helpful writing companion for thing like:
- writing first drafts of emails, newsletters and presentations
- helping illustrate those same newsletters and presentations
- organising and categorising incoming email
- tracking industry trends
- reporting on industries and competitors
So a business trend of 2024 will be implementing AI into certain aspects of business and – more importantly – constructing formal processes that mitigate the inherent but manageable risks of doing so.
How do we know this stuff?
Xero has 3.9 million small business subscribers in 180 countries. We based this small business trends 2024 report on their experiences.
Specifically, data came from these surveys and reports:
- Xero 2023 – The global state of small business owner wellbeing
- Xero 2023 – Money matters
- Xero 2023 – Optimize your ecommerce strategy for online shopping trends
- OECD, Accenture, Xero 2021 – Small business as usual
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