Strategies for Chicago-area small business owners to grow amid uncertain economic environment
As the second half of 2024 comes into focus for small business owners, entrepreneurs across greater Chicago largely are confident about the future of their businesses.
In fact, according to new Bank of America research, 55% of Chicago-area small business owners surveyed are planning for growth in the year ahead, and 50% expect the national economy to improve, compared to 33% nationally. Both metrics illustrate the confidence local entrepreneurs have in their ability to maintain profitability in the face of persistent challenges, which include key economic factors such as inflation, supply chain issues, rising costs of healthcare, and an uncertain political environment.
Despite those concerns, nearly 7 in 10 Chicago-area business owners are anticipating an increase in revenue in the coming year. Here are three actionable strategies Chicago-area entrepreneurs should consider implementing to position themselves for growth this year.
Conduct a SWOT analysis
It’s smart to conduct routine evaluations of your business, but especially ahead of any upcoming shifts in the economy or political environment. Consider prioritizing time to analyze your business’ strengths, weaknesses, opportunities, and threats (SWOT).
A SWOT analysis not only helps evaluate the state of your business but will help identify what changes and trade offs are needed to ensure success. Eighty-one percent of Chicago-area small business owners say they have made trade offs to maintain profitability, including working additional hours, reducing their own salary, raising prices, or cutting marketing costs. A thorough SWOT analysis will ensure any trade offs or operational adjustments are informed and compatible with your long-term business goals.
Monitor your cash flow
Tracking current and anticipated revenue and business expenses — and conducting routine comparative analyses of both — is key to maintaining the cash flow needed to support business growth. When you prioritize this activity, you can better anticipate when to adjust your business model proactively, which can help avoid unnecessary costs.
Digital tools can be helpful in both cash flow monitoring and in future-proofing your business. According to our research, 79% of Chicago-area small business owners have digitally optimized their business and operations in the past 12 months, and over half of those small business owners are using mobile apps or business banking online. What’s more, 59% of Chicago-area entrepreneurs plan to utilize automation and artificial intelligence tools this year compared to 37% nationally, showcasing our business community as leaders in digital implementation.
Digital tools give business owners more flexibility to manage their finances anytime from anywhere; when confronted with economic uncertainty, this can be particularly useful, allowing for faster and more informed decision-making around cash flow management.
Reconnect with customers
It’s important to remember that the economic and political uncertainty impacts customers, not just business owners, and acknowledging that we are all weathering these challenges together is key.
As you are able, carve out time to connect with your customers in authentic ways, which builds loyalty and helps them remember the value you add to their lives when times are tough.
In the Chicago area, 95% of small business owners have implemented new tactics to engage with their clientele, including personalizing interactions with customers, implementing customer feedback, or hosting community events. Consider if any of these options are viable options that may help your business stand apart from others in its space.
Whether your small business has been around for decades or is just getting off the ground, there always are ways to strengthen operations and leverage new digital tools. Bank of America is committed to providing the resources necessary to operate and grow a business at every stage of business.
• Mike Granata is the senior vice president, small business region executive for Bank of America in the Chicago area.