Small businesses are the backbone of the American economy, stimulating economic dynamism, innovation, and job creation. However, the combination of economic uncertainties, inflation, rising labor costs, and the need for operational efficiency has driven SMBs to explore global options, such as offshoring as a viable strategy to sustain and grow their businesses amidst challenging times.
Small Business Statistics of 2024
A recent Forbes article reveals that there are 33.3 million small businesses in the United States, comprising a staggering 99.9% of all businesses in the country.
Moreover, the article points out that small businesses have been instrumental in job creation over the past 25 years, generating nearly 13 million net new jobs during this period.
U.S. Government Support
Recognizing the importance of small and medium-sized businesses (SMBs), the U.S. government is actively supporting SMBs through various initiatives and programs aimed at providing critical assistance and resources.
Small Business Administration (SBA) Programs:
The Small Business Administration oversees programs that offer counseling, training, access to capital, federal contracts, and disaster assistance to small businesses and entrepreneurs.
The SBA provided over $1 trillion in relief funds to support small businesses affected by the COVID-19 pandemic.
Biden-Harris Administration Initiatives:
The Biden-Harris Administration has announced new actions to expand small business access to federal contracts.
Initiatives include revamping mentoring programs, expanding lending programs focused on underserved communities, and making critical reforms to loan programs to address barriers to access.
Treasury Department Support:
The Treasury Department is providing critical assistance to small businesses through various programs like the State Small Business Initiative (SSBCI) that deliver funding, technical assistance, and support for small businesses and underserved communities.
COVID-19 Relief Efforts:
The Treasury Department is facilitating the urgent deployment of capital and support to help small businesses persevere and recover from the economic challenges posed by the COVID-19 pandemic such as inflation and rising costs.
Programs like the Employee Retention Credit, Paid Leave Credit, Emergency Capital Investment Program, and Paycheck Protection Program are part of the government’s efforts to provide critical tax benefits and financial support to SMBs.
Small Business Outlook
A recent U.S. Chamber of Commerce Small Business report underscores the dual dynamics of rising concerns, particularly related to inflation and hiring, alongside small business owners’ unwavering confidence in their ability to overcome obstacles and drive success in the current business environment.
Rising Concerns:
Small businesses are facing significant challenges related to inflation and the difficulty of finding employees.
Inflation has emerged as a major concern for small business owners, impacting their operations and financial stability.
The struggle to find qualified employees has added to the challenges faced by small businesses, affecting their ability to meet staffing needs and sustain growth.
Small Business Owners’ Confidence:
Despite the challenges posed by inflation and labor shortages, small business owners remain confident in their success and the resilience of their businesses.
The outlook among small businesses has brightened, with many owners feeling positive about their financial health and cash flow, indicating a sense of resilience and adaptability in the face of challenges.
Plans for Small Business Expansion in 2024
Small business owners are optimistic about growth in 2024, despite facing challenges like higher costs and difficulties in retaining qualified workers.
A new survey from American Express indicates that 85% of small businesses are satisfied with their business success, with 86% achieving their 2023 business goals, reflecting a positive outlook for the future.
While 50% of small businesses intend to grow or expand, only 28% plan to hire more employees due to challenges in hiring and retention compared to larger businesses offering higher salaries and benefits.
Small businesses continue to demonstrate resilience and dedication even amid inflation and uncertain economic conditions. To stay proactive and competitive, small businesses are taking steps such as implementing new tools and looking at offshoring to drive growth and success in 2024.
Offshoring as an Innovative Solution
Inflation, economic uncertainties, rising costs, and operational efficiency have led SMBs to consider offshoring as a strategic solution. Offshoring allows small businesses to streamline operations, reduce costs, access specialized skills, and enhance their competitive edge in the market.
Benefits of Offshoring for Small Businesses
Cost Savings: Offshoring to countries like the Philippines can significantly reduce labor costs, allowing small businesses to operate more efficiently and competitively.
Access to Professional Talent: Offshoring provides access to a pool of English-speaking, college-educated professionals with expertise in various fields like IT, customer service, and administrative tasks.
Scalability: Offshoring allows SMBs to scale their operations quickly by adding offshore services as needed, enabling rapid business growth and flexibility.
Control Over Operations: Offshoring provides businesses with greater control over their operations compared to traditional outsourcing, allowing for more direct oversight and management.
Quality of Life for Offshore Staff: Offshoring to countries like the Philippines offers a high quality of life for employees, ensuring job satisfaction and retention.
Challenges of Offshoring for Small Businesses
Legal and Regulatory Compliance: Small businesses need to navigate international laws and regulations when offshoring, ensuring compliance with data protection and privacy standards.
Communication and Cultural Differences: Managing remote teams in different countries can pose challenges related to communication, time zones, and cultural nuances that require effective management strategies.
Risk of Intellectual Property Theft: Protecting intellectual property becomes crucial when offshoring, necessitating robust security measures to safeguard sensitive information.
Tips for Small Businesses Considering Offshoring
Research and Due Diligence: Conduct thorough research on offshoring destinations, service providers, and legal requirements to make informed decisions.
Start with Pilot Projects: Begin with small-scale offshoring projects to test the waters and assess the feasibility and benefits before scaling up operations.
Establish Clear Communication Channels: Implement effective communication strategies to bridge the gap between onshore and offshore teams, ensuring seamless collaboration and understanding.
Legal and Regulatory Compliance:
iSupport assists small businesses in effectively navigating international laws and regulations by providing expertise in data protection and privacy standards, thereby mitigating risks associated with legal and regulatory compliance when offshoring.
Communication and Cultural Differences:
iSupport aids small businesses in managing remote teams through effective strategies, clear communication channels, and cultural sensitivity training, bridging communication gaps between onshore and offshore teams, and promoting understanding and effective practices.
Risk of Intellectual Property Theft:
iSupport is dedicated to safeguarding sensitive information through rigorous data protection protocols, secure communication, and confidentiality agreements during offshoring. Thus, reducing the risk of intellectual property theft and safeguarding small businesses’ intellectual property.
A recognized Leader in the Offshore Industry:
Inc. Magazine has recognized iSupport Worldwide as a Power Partner, emphasizing the company’s superior outsourcing solutions and commitment to customer satisfaction.
iSupport has continuously fulfilled the quality standards set by its customers by offering employee programs that help retain top talent and a simplified recruiting procedure that delivers it.
Are you ready to explore your global option with offshoring?
Contact our team today for a no-obligation consultation and learn how we can help your business thrive.