As we head into the new year, we are curious about the trends, decisions and opportunities that will shape 2023 for small businesses. And who better to ask than the small businesses that trust us at Kippa as a partner for running their business?
We asked over a hundred business owners to answer questions about technology, social media use, logistics and payments in 2023. The results are in and they are interesting!
If you are a small business owner or building products for small businesses in Nigeria, here’s what small businesses will look like in 2023.
Logistics will continue to pose a challenge
Logistics is the backbone for the millions of small businesses in Nigeria that run social commerce. But in 2023, the issues of cost, unreliability and personnel problems that have plagued logistics in Nigeria will persist.
How are business owners going to navigate this in 2023? 45.4% of our respondents are going to use current delivery options or companies when needed. 33.6% are open to subscribing to a delivery company while only 20.9% are considering the bold but expensive choice of buying their own delivery vehicle.
Transfers Are Still King
70.5% of our respondents want to be paid for their goods and services with transfers. Only 9.9% want cash as a mode of payment. This is an important shift ahead of the Central Bank of Nigeria’s implementation of a cash withdrawal policy and new Naira notes
Customers will continue to demand flexibility in payment options with a bulk of payments through digital channels like POS, USSD, card and internet banking. The writing is on the wall and if you are a small business, it’s time to start thinking of how to expand the ways you can collect payments from customers.
A great indicator of this change in behaviour is that 72.0% of respondents are willing to obtain POS terminals to receive payments for their businesses in 2023.
Friends & Family Will Open Their Wallets
With over 50% of respondents looking to expand their number of products and services in the new year, financing is a crucial subject.
Determining where this funding will come from is where it gets interesting. Taking a loan once considered a taboo subject for small businesses is now gaining mainstream acceptance with 59.2% of respondents open to taking a loan in 2023 while 40.7 are against the decision.
For businesses open to taking a loan, the most popular funding source is friends and family with 34% voting that they will be asking their friends and family to open their wallets and invest in the new year. 31% will look to loan offerings from commercial banks while 29% will pursue loans from microfinance banks in search of friendlier rates and terms.
Financing for small businesses remains an untapped market for financial institutions and companies. The majority of the funding options are dominated by grants like the Tony Elumelu Foundation Entrepreneurship grant and government-backed initiatives such as the Lagos State Employment Trust Fund. Businesses that invest in building financing products tailored to small businesses will find a ready market waiting.
Social Media Will Be Crucial & Hello Whatsapp!
An overwhelming 96.4% of our respondents agree that social media will be an important tool for finding customers in 2023.
From ads to promotions, collaborations and influencer marketing, social media provides an opportunity for small businesses to reach new customers and locations and we expect this to continue strongly in 2023.
Interestingly, the two top social media platforms for small businesses are Whatsapp with 32.2% and Instagram with 30.4%.
Since the introduction of WhatsApp Business in 2018 with the ability to add information like business description, address, catalogue, email and website, businesses have turned to Whatsapp to manage orders, interact with customers, advertise products and confirm payments.
WhatsApp has rolled out payments in India and Brazil to some extent and many observers are of the opinion that full payment functionality will cement Whatsapp’s place as the go-to business platform. It will be interesting to see what new features WhatsApp rolls out to support businesses in 2023.
Video Is The Way To Go
Going into 2023, video content will be the most impactful kind of social media content for small businesses according to 57.1% of our respondents. Video is preferred for its ability to build trust and establish authenticity. With the emergence of a lot of scams posing as legitimate businesses, posting video content is a proven way of assuring your customers.
The benefit of being able to see the future is that you can adequately plan for it. Now that you know what the new year will bring, don’t enter into it unprepared. Register your business to make you eligible for opportunities, Request a POS to accept card payments and keep an eye on your business growth with the ultimate business management tool.