Supplier costs continue to rise. Rising prices continue to influence consumer behavior. Global violence makes people vulnerable. All of these economic trends are hurting small and medium-sized businesses as we move toward 2024. 12% think they won’t be able to keep up for long in 2024. Here’s the good news: 88% of Canadian SMBs surveyed say they’re confident they’ll be given a company has grown over the next three years — . Growth from 83% by 2023.
Regardless of what you see coming in the coming years, it’s important to understand your financial situation in order to build a successful and sustainable business. Revenue will be critical in the coming year, and finance and consumer technology, as well as solving management challenges, should be top of mind.
Economic growth and challenges facing Canadian small and medium enterprises
Here are some of the key economic trends and challenges that SMBs will have to face in 2024.
Economic concerns
Are we headed for a recession? That’s the big question we’re all dealing with. The Conference Committee of Canada now believes we will avoid a recession recovery by 2024. Others disagree. Either way, SMBs need to take tight control of their finances and prepare for what lies ahead.
The Bank of Canada is expected to hold interest rates steady in the first half of 2024, with no rate cuts until mid-year. Higher interest rates slow many aspects of the economy, including consumer spending. SMBs seeking funding may find it expensive, and credit can be very restrictive.
SMBs must make tough decisions about adding value and managing cash flow as wages rise and costs rise due to staffing challenges
Consumer behavior
The long-term economic trend that will take place by 2024 is that consumers are shopping online. With nearly 93% of internet users across Canada, the e-commerce market in Canada is forecast to reach $71.7 billion by 2024. However, many small businesses across the country are lagging behind e-commerce solutions to be developed internally Businesses have their e to compete -Internal marketing strategy should be explored, especially with regard to young consumers.
In the event of a recession, expect changes in consumer behavior. As jobs shrink, many Canadians will suddenly be out of work or on part-time jobs. In particular, demand for goods and services that are not perceived as essential decreases.
Consumers also focus on sustainable practices and environmentally friendly practices in their decision making. Many people expect transparency in how businesses operate as part of a buying decision. From 2024, banks and insurance companies face mandatory disclosures on climate-related risk and exposure. While most SMBs do not have this type of reporting requirement, you are expected to be very satisfied with your performance.
Labour Laws
As part of the Labor Code, the new law takes effect on January 1, 2024, and increases employers’ responsibilities when laying off employees in federally regulated businesses who have worked for three or more years as more reports will be given to him. Up to eight weeks notice is required for employees who have been with the company for eight or more years. There are also additional requirements for benefits, wages and severance pay information that must be provided.
Companies using employment contracts will want to review them to ensure compliance with the new provisions. Employees must update employee handbooks and policy documents to comply with the new guidelines.
What SMBs can do to prepare for 2024. Get financial advice
Consideration of accountancy and finance professionals such as Taxlink CPA Chartered Professional Accountants should be a priority in 2024 to consider how to prepare for the upcoming economic recession. A Best CPA Firms can provide expert guidance on budgeting, capital management, investment strategies, and more to help SMBs adapt to evolving economic conditions.
How they adapt to changing customer preferences
SMBs need to analyze their products and services, looking at ROI in light of changing consumer behavior. Enhancing e-commerce and digital offerings, managing supply chains and tightly controlling costs are all part of the SMB landscape moving forward.
Application of Technology
SMBs need to stay abreast of technology and find ways to streamline operations. The right technology can increase competitiveness by automating businesses. Getting feedback from your accounting firm can help you find new ways to improve your cash flow and reduce your accounting workload.
SMBs should also examine their current cybersecurity to mitigate risk..
Remain Compliant
Compliance is essential. Regulatory and reporting requirements are changing, and SMBs must comply with changing regulations to avoid costly problems. A CPA firm can help ensure that businesses comply with the latest accounting, tax and other financial standards.
Get professional finance
With these complex challenges facing SMBs in 2024, you need a trusted advisor to help guide you, keep you compliant and manage your finances.
Taxlink CPA Chartered Professional Accountants is a trusted Canadian top accounting firm in canada in BC, focusing on serving small businesses, entrepreneurs and not-for-profit organizations Our highly experienced team of accountants understand the needs of small and medium businesses special under and dedicated to helping you manage your finances and grow your business .
Contact Taxlink CPA Charted Professional Accountants today to book your consultation.