40% of digital small businesses are “bullish” on the economy in 2023; 56% of owners see recession as opportunity for growthFlippa, the #1 global online marketplace to buy and sell online businesses, today released data from a new report on, “Recession Impact on the Digital Small Business Economy.” The data reveals that despite growing pessimism around a looming recession and persistent inflation, there is a savvy community of entrepreneurs that are optimistic and bullish on growth.
These are owners of digital businesses, such as mobile apps, ecommerce stores, blogs, and other online businesses that make up the “Main Street” of the digital economy. The global survey of more than 1,200 digital small businesses captured insights into owners’ economic sentiment and business outlook for 2023.
“The digital economy is the new economy and these business owners are remarkably positive and creative in challenging business conditions. With 56% of respondents stating that they see this market as an opportunity for growth, there is reason for optimism. 2023 will no doubt challenge some, but we will be celebrating this sector of the market for its resilience,” said Blake Hutchison, CEO of Flippa.
Key Data Insights Revealed:
No Bull: Digital SMBs See Recession as Growth Opportunity
While inflation was rated the #1 concern for digital small businesses this year (32% of respondents said it was their biggest concern), 40% of digital small businesses owners are bullish on the economy – with only 25% saying that they are “bearish.” Fifty-six percent of survey respondents view the possible recession as an opportunity for growth this year.
The survey also showed:
- Most digital business owners are expecting high growth in 2023: 58% of digital business owners expect their businesses to grow by 11%-50%+ during 2023. In fact, 45% are increasing their prices. The survey revealed that over a quarter of respondents (32%) plan to increase prices by more than 10%.
- Digital businesses are taking proactive steps to safeguard their growth this year, including:
- Acquiring a complementary digital business or asset: 49% of respondents
- Increasing content marketing: 47%
- Raising capital: 37%
The Best Investment for 2023? All Roads Lead to Owned Content
It’s conventional wisdom that when recessions hit, businesses tend to cut back on advertising. Despite this, instead of traditional advertising, the data found that 47% of digital business owners are increasing content marketing in 2023.
Small digital business owners are investing in owned media and content generation. In fact on the Flippa marketplace, there are ~300,000 unique searches for content related assets each day. Why? Because content marketing and “owning” your business’s audience and attracting traffic to your website is a cost-effective strategy to keep and attract customers. The cost of acquiring a customer is far higher than it’s ever been.
In fact, according to the survey, here are a few reasons why content marketing is becoming a more popular strategy for small digital businesses this year:
- 42% of owners said they have experienced a decrease in business over the past year as a result of increased inflation
- 21% said they have experienced reduced order size from customers
Shaping Government Policy: Digital Owners’ SOS Calls To POTUS Exposed
Inflation is not the only thing weighing on digital entrepreneurs’ minds this year. Data reveals that 24% of small online business owners are concerned about growth capital and 22% are concerned about marketplace taxes. There is opportunity here for public policymakers and government officials to do more to support this sector of the economy.
When asked what the U.S. government can do to better support digital small businesses, the survey respondents offered several suggestions, including these common themes:
- More policy support and help for digital small businesses
- Special funding opportunities
- Tax benefits and lower taxes
M&A Will Flourish: Entrepreneurial Exodus Expected in 3-5 Years
Digital business deal-making is picking up momentum – many buyers are recording 25-50% annualized returns. This translates to strong results for online business owners looking and planning for an exit.
The data shows:
- 11% of digital entrepreneurs plan to exit in 2023
- 26% say that their exit timing is in the next 3-5 years
Until then, digital business owners are still in build mode. When asked what is their personal Golden Rule of Digital Entrepreneurship for 2023, 36% of entrepreneurs said: “Invest for growth. Now is the time to place a bet.”