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Small Business Trends for 2024
March 7, 2024

Small Business Trends for 2024

2023 was a year of significant challenges for businesses, especially for small and medium-sized enterprises (SMEs) in Canada. Supply chain disruptions, inflationary pressures, and recruitment and retention challenges were just a few of the hurdles that put the resilience of SMEs to the test. The effects were profound, with company insolvencies in the third quarter of 2023 rising by 40% compared to the previous year, surpassing even pre-pandemic figures, according to the Office of the Superintendent of Bankruptcy.

Yet, forward-thinking businesses that stay informed about key sector trends may position themselves to not just survive but thrive in the year ahead. Here are several pivotal trends expected to influence small businesses in 2024:

  • Generative Artificial Intelligence (GenAI): The rapid pace of technological advancement makes digital transformation indispensable. GenAI has emerged prominently, providing AI tools that streamline operations, enhance efficiency, and bolster customer support. For example, AI applications like ChatGPT can effortlessly assist with writing product descriptions, while AI-driven chatbots manage routine customer inquiries, freeing up valuable time for more strategic work. Nonetheless, adopting AI comes with its challenges, particularly concerning data privacy and the required skill set for effective use. Research from Salesforce indicates that only one in ten workers possess AI skills. Companies leveraging AI in 2024 must commit to responsible deployment, ensuring employees are well-trained and fully aware of both the advantages and potential issues associated with AI.
  • Skills-Based Hiring: The labour market remains competitive, and SMEs may continue to face hiring and retention obstacles in 2024. The 2024 Talent Shortage Survey by ManpowerGroup reveals that 80% of Canadian employers find it challenging to source talent with the necessary skills. A shift toward skills-based hiring, which prioritizes competencies over specific job qualifications, may enhance recruitment efforts. By focusing on cultivating soft skills like problem-solving and communication, small businesses can broaden their talent pool and effectively compete for candidates.
  • The Flexible Working Evolution: The trend towards flexible work arrangements seems permanent. A Cisco report shows that 81% of Canadians consider flexible working models a decisive factor in their employment choices. Responsive small businesses are expected to revise their policies and invest in technologies that support such flexibility and encourage collaboration.
  • Sustainability: Consumer preferences are increasingly leaning towards environmentally friendly products. Sustainable business practices will, therefore, be a priority for SMEs aiming to improve their brand reputation and attract conscientious customers. Actions such as providing fair wages and supporting local suppliers represent straightforward ways for small businesses to demonstrate social responsibility in 2024.
  • Customer Connection: In 2024, leveraging predictive analytics and behavioral data to customize products and customer experiences will be crucial for enhancing engagement. However, businesses must ensure that customer interactions retain a personal touch, as there’s still considerable demand for human connection within the digital landscape.
  • Cybersecurity: As reliance on technology grows, so does the risk of cyberattacks. SMEs, often with limited resources, may find themselves particularly at risk. Investing in comprehensive cybersecurity measures and promoting cyber hygiene among employees will be essential for minimizing risks in 2024.

As we move past a tumultuous 2023, it is critical for small businesses to reevaluate their operational practices to ensure they are well-positioned for the challenges and opportunities of the new year. By embracing technologies like AI, strengthening cybersecurity defenses, and committing to sustainable practices, SMEs can adapt to the evolving business environment. In this landscape of continuous change, it is equally important for business owners to ensure that their insurance policies keep pace. As your operations evolve, so too should your coverage, to adequately protect against new exposures and opportunities.

CMB Insurance Brokers specializes in assessing these dynamic needs and can guide you in updating your insurance solutions to match your current business model. This tailored approach ensures that you remain resilient in the face of both current and emerging risks.

For comprehensive risk management guidance and insurance solutions that evolve with your business, contact CMB at 780.424.2727 or click here to get a quote.