Richard

Stoicism is a school of philosophy that is gaining popularity among startup founders for a good reason – its values and the mindset it teaches are very well suited for overcoming adversity and keeping yourself mentally healthy in hard situations.

Marcus Aurelius – the Roman emperor from 161 to 180 AD, is without a doubt one of the most famous Stoic philosophers. Despite living two millennia ago, his wisdom is to a large degree applicable to startups for the simple reason that the character qualities and values that help people prosper personally and professionally are timeless and not context-dependent.

So, here are 6 quotes from him that will help you on your startup journey:

1. The more we value things outside our control, the less control we have. – Marcus Aurelius

As a startup founder, many things are beyond your control, such as market conditions, customer behavior, and economic trends. Moreover, your time and resources are limited. Consequently, instead of worrying about these factors, it is essential to focus on what you can control, such as your product development, sales and marketing strategies, and team-building efforts.

Of course, you still need to be cognizant of your environment even if you can’t control it, as it presents opportunities and threats.

2. Confine yourself to the present. – Marcus Aurelius

As an entrepreneur, it is easy to get caught up in future goals or to worry about the outcomes of your efforts.

Planning is important, but overthinking the future could counter-productive. The same is true about analyzing the past – taking lessons from past mistakes is crucial, but dwelling on them is destructive.

By confining yourself to the present moment, you can stay focused on what you need to do right now to move your business forward.

How do you climb that mountain? One step at a time.

3. How ridiculous and how strange to be surprised at anything which happens in life. – Marcus Aurelius

As a founder, you need to prepare yourself to be surprised and to be wrong quite often. The whole idea of the early startup stages is to test your ideas against reality and to find out in what way they need to be changed before investing in them heavily.

If you hold your beliefs too dearly, then you wouldn’t be flexible enough to succeed in the extremely unpredictable and dynamic tech environment.

4. Each day provides its own gifts. – Marcus Aurelius

While this thought is mostly about appreciation, it is also true about opportunities. To be a good startup founder you need to be able to spot them and seize them.

Of course, you need to be ready to create them as well.

5. Conceal a flaw, and the world will imagine the worst. – Marcus Aurelius

As a founder, you would make mistakes and fail often – when you deal with innovation, this is unavoidable. Because of this being honest with your stakeholders (and yourself) is crucial for two reasons. First, to build trust. And second – to buy yourself the freedom to take the optimal course of action without fear that the people around you have different expectations that you’ve built through dishonesty.

6. Have I been made for this, to lie under the blankets and keep myself warm? – Marcus Aurelius

Turning an idea into a real, working business is without a doubt a very hard task. What would motivate you to continue moving forward when the going gets tough?

If you embark on a startup journey, you need to be prepared to abandon comfort for the sake of ambition and more importantly – for the sake of what you find meaningful.

Median asking rents are beginning to dip in many markets, according to new data from Redfin, a turnaround from the skyrocketing rent prices observed last spring. The median national asking rent fell to $1,937 in March, a 0.4% year-over-year decline. Median asking rent prices are lower than they’ve been in over a year, and the days of bidding wars for an apartment are coming to an end in many markets. It’s indicative of a correction from overinflated rent prices that resulted in part from a pandemic-driven demand for more space. But rents are still about 20% higher than they were when the pandemic began. 

Why Are Rent Prices Cooling?

From the supply side, new housing construction has finally caught up to pandemic demand. In 2022, there were more multifamily housing starts with five units or more than in any year since 1986, according to Census Bureau data. And the number of completed multifamily buildings with five units or more surged 72% in February, reaching one of the highest levels in decades. 

Rental demand is also waning. Due to rapidly-rising rent prices in 2022 and fears of an upcoming recession, renters are discouraged from moving and incentivized to stay in their current leases. And housing affordability issues are causing more older folks to move in with their adult children, even before their health declines. More young people are renting with roommates and parents as well. These factors are causing rental vacancy rates to rise, returning to their long-term average. 

The short-term rental market paints a similar picture—investors rushed to meet the demand for vacation rentals during the pandemic, and the surplus of properties is leading to increased vacancy rates. That’s true even as demand remains surprisingly strong amid inflation-strained budgets and recession fears.

Where Are Rent Prices Falling the Most?

1. Austin, Texas (-11%)
2. Chicago, Illinois (-9.2%)
3. New Orleans, Louisiana (-3%)
4. Birmingham, Alabama (-2.9%)
5. Cincinnati, Ohio (-2.9%)
6. Sacramento, California (-2.8%) 
7. Las Vegas, Nevada (-2.4%)
8. Atlanta, Georgia (-2.3%)
9. Phoenix, Arizona (-2.1%)
10. Baltimore, Maryland (-2%)

The largest declines in median asking rent prices were in Austin, where asking rents dropped 11%, and Chicago, where asking rents dropped 9.2% from the previous year. Last May, Austin had the highest year-over-year increase in rent prices, at 48%, according to Redfin data. This was a result of tech companies relocating to the area and attracting new high-earning residents at a time when mortgage rates were increasing. In the second quarter of 2022, lead data began to show renters looking to move out of Austin. Now, rent prices are normalizing in the city due to curbed demand. 

Cincinnati saw a similarly significant year-over-year rent increase last May, so rents are normalizing there as well. In Chicago, the rental supply increased during the pandemic as new landlords tried to cash in on high rents, and many chose to rent rather than sell at the tail end as homebuying demand decreased, according to Chicago Redfin real estate agent Dan Close. 

Where Are Rents Rising?

1. Raleigh, North Carolina (16.6%)
2. Cleveland, Ohio (15.3%)
3. Charlotte, North Carolina (13%)
4. Indianapolis, Indiana (10.5%)
5. Nashville, Tennessee (9.6%)
6. Columbus, Ohio (9.4%)
7. Kansas City, Missouri (8.1%)
8. Riverside, California (7.2%)
9. Denver, Colorado (7%)
10. St. Louis, Missouri (4.2%)

In some metros, rents just keep rising, but even the 16.6% year-over-year growth in asking rent in Raleigh doesn’t come close to the increases shown in last year’s data. A thriving tech scene in cities like Raleigh, Charlotte, and Nashville continues to bring new residents in droves, keeping rent prices inflated even as new residential buildings are erected. 

At the same time, high home prices and rising interest rates turned many would-be homebuyers into renters. For example, in Denver, skyrocketing home prices in recent years have led to a growing group of high-income renters who were priced out of homeownership. 

Jennifer Bowers, a Redfin real estate agent in Nashville, says asking rents are also rising in the city because a huge influx of investors bought properties in the area. This contributed to soaring demand by increasing the competition for starter homes, thereby making it possible for investors to charge top-dollar rents. Investors accounted for 26% of home sales in Tennessee during 2021, according to Pew Research. 

What This Means for Investors

This data doesn’t necessarily mean that investors should flock to multifamily investment opportunities in cities like Raleigh and Cleveland. After all, imagine if you had bought a home in Austin last March in an attempt to capture high rents up 38% year-over-year. A year later, you’d be lowering your asking rent and waiting for an average 16.3% decline in year-over-year home values to turn around. 

Thinking one step ahead could yield better results. If you can find a market where home values are still relatively low, and rent prices are likely to rise due to projected job growth in the area or overflow from nearby hubs, you’ll be in a better position to reap the rewards of local rent increases. 

Still, there’s no crystal ball foretelling the perfect strategy. Real estate and rent prices will always fluctuate, though some markets are more stable than others. Maintaining flexibility and having patience may serve you even better than nailing the perfect timing for your purchase.  

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

Nitin Chexal of Palladius Capital Management says the U.S. economy is generally “robust” and “very healthy,” though there are short-term headwinds to deal with.

Closing the gap between a freelance practice and a scalable business requires a shift in mindset, and taking a leaf out of the startup founders’ book would put you on the right trajectory:

1. Productizing Your Offering

You and you are time are not scalable. This means that the first and most important step is to solve this problem. There are generally speaking two ways to do this – with people, and with technology. The first way will turn your practice into an agency. The second, which is more interesting for this article – to a startup.

Productizing your offering means turning your services into a product that can be sold repeatedly to multiple customers at minimum cost, or at least getting as close to that ideal as possible.

To do this, you need to identify the core elements of your service that can be standardized and packaged. For example, if you’re a freelance writer, you could create a series of templates or content packages that can be customized for different clients. If you are a designer or artist – a course or a package of tools for artists and/or designers.

Productizing your offering requires careful planning and a focus on creating a high-quality, repeatable product that meets the needs of your target audience as closely as possible. At the same time, it also means your goal is to customize it for individual customers as little as possible, which is a 180-degree shift from the way a freelancer usually thinks about their work with clients.

For example, an ebook is a perfectly scalable product – you can sell it to an unlimited amount of people with zero customization and close to zero marginal cost.

2. Shifting from a Solopreneur Mindset to a Team-Oriented Mindset

As a freelancer, you may be used to working on your own and handling all aspects of your business. However, to scale your business and turn it into a startup, you’ll need to shift from a solopreneur mindset to a team-oriented mindset. This means hiring employees, contractors, or freelancers to help you with various aspects of your business.

Productizing your offering might require expertise that you don’t have. You should be prepared to involve other people and invest financially in this project.

3. Developing a Comprehensive Business Plan

Freelancers may not always prioritize long-term planning, but a comprehensive business plan is crucial for turning your business practice into a startup. This plan should outline your vision, target audience, revenue streams, and growth potential. It should also include details about your marketing and sales strategies – as a freelancer, you may be used to getting new clients from referrals or from directly applying to jobs or gigs. This is usually not sufficient if you are selling a new product, however (or a productized service). Your marketing efforts need to be scalable, and you need to make sure that the cost of acquiring a new customer is sufficiently low to be covered by the price of your product, otherwise, your efforts to scale your business wouldn’t make economic sense.

Moreover, since you would be investing time and resources into this project, it is important to have basic financial projections.

If you don’t intend to search for outside partners or investors all of this information doesn’t necessarily have to be presented in an official business plan. Creating one anyway, however, is still a good idea as it helps you structure your thoughts and see potential problems in your plans.

This article is presented by Steadily. Read our editorial guidelines for more information.

Investing in real estate comes with risk, and having the right insurance coverage is critical to protecting your rental property investment. Just as each property is unique, your insurance policy should also be custom to your dwelling type, location, duration of the rental agreement, and more. 

Understanding the nuances of coverages for short-term, medium-term, and long-term rentals is especially important, as the wrong type of policy can render your claim denied by an insurer. This is because the risk of a long-term tenant is perceived differently from that of a property rented out on a short-term basis, such as an Airbnb or vacation rental. So, how do you know if you have the right coverage in place? In this article, we will take a closer look at each type of insurance policy and its key differences.

Disclaimer: This article discusses insurance coverage in general regarding what is common in the insurance industry. Every carrier’s policy is different, and it is the responsibility of the insured to review their policy for coverage, terms, and conditions. 

Short-Term Rental Insurance

Short-term rental insurance is designed to provide coverage for properties that are rented out on a short-term basis, typically for a period of fewer than 30 days. This type of insurance is often used by property owners who rent out their homes on vacation rental platforms like Airbnb and VRBO.

Short-term rental insurance typically includes property damage, theft, and liability coverage. This means that if a guest damages your property or steals something from your home, your insurance policy will cover the cost of repairs or replacement. Additionally, short-term rental insurance often includes liability coverage, which can protect you from lawsuits in the event that a guest is injured on your property.

Some short-term rental insurance policies may also include coverage for lost rental income if your property becomes uninhabitable due to damage caused by a covered event. This can be particularly important if your rental property is a major source of income for you. 

Many short-term rental hosts rent out a second home previously covered by a homeowner’s insurance policy. It’s important to note that homeowners insurance covers properties from specific perils such as fire, lightning, and hail, but homeowners insurance policies specifically exclude “business activity.” And because most STR hosts do not live in their rental properties, coverage limitations likely apply. If your insurance company catches wind that your home is not actually occupied by you (or whoever is the policyholder), and the property is damaged by a renter instead, they will almost always reject your claim.

There is one exception in which your homeowner’s insurance may cover your short-term rental, and that is if you are also living on the property. If you have a multifamily property and are living on the premises, your homeowner’s insurance carrier may offer a “unit or residence rented to others” endorsement. This endorsement will cause your premium to increase but will likely be cheaper than purchasing a new line of insurance altogether.

Most insurance providers offer pretty affordable plans, considering the coverage included in short-term rental insurance policies. In addition, you can get a free quote from each insurer to determine how much you’ll need to pay each year.

The average cost for a short-term rental insurance policy ranges between $2,000 and $3,000 every year in the U.S. However, this range can increase up to $9,000 per year if your rental home is in popular tourist destinations like Florida or California. 

It’s important to note that short-term rental insurance policies are not one-size-fits-all. Depending on the insurance company, policy options may vary widely, and the specific coverage you need may vary depending on the location of your property and the length of time it will be rented out. 

Medium-Term Rental Insurance

In insurance, there is technically no medium-term range. Policies either fall into short-term or long-term rentals. Carriers typically look at anything under six months as short-term. However, some carriers extend this to include anything under 12 months. This type of insurance is often used by property owners who rent out their homes or apartments on a temporary basis, such as business travelers, travel nurses, or people who are in the process of relocating. 

The type of insurance policy will depend on the carrier you are working with. Coverages for mid-term rentals are similar to short-term rentals, including property damage, theft, and liability. 

A good, comprehensive policy will include three key protections:

1. Property damage – This covers any damage to the property caused by fire, water damage, vandalism, theft, irresponsible tenants, or other things that could damage the physical structure of the property. Not all policies are created equal – some basic policies only cover the perils that are named like fire, lightning, smoke, and hail. Other policies are broader and cover everything unless it is specifically listed as an exclusion on the policy. Virtually every policy these days includes a COVID-related exclusion.   

2. Loss of rental income/rental income protection – Should something occur that causes your property to be uninhabitable, such as a fire or burst pipe, this coverage provides temporary rental income reimbursement that acts as a replacement for the rent a landlord would be receiving as usual if a tenant was occupying their property. Insurance companies will verify your financials to support the rental income amount, so a landlord won’t be collecting $1,000 per month on a property that was previously rented out for $500. 

3. Liability – Covers any medical or legal fees and settlements, such as lawsuits, bodily injury claims, and settlement costs, that could ensue if a tenant or a visitor were to get injured on the premises.

Additional coverage you may want to pursue to further protect your investment:

• Flood insurance covers flood damage which almost every policy excludes. This is often a separate policy, but can usually be purchased through your same agent.
• Earthquake Insurance covers earthquake damage which almost every policy excludes. This can be purchased similarly to flood insurance as a separate policy. 
• Guaranteed income insurance covers partial or full rent payments if the tenant is unable to pay, something many landlords experienced during the height of the pandemic. This one is always a separate policy.
• Personal property coverage covers your furnishings if you are renting out a furnished rental unit. This is usually available in every landlord policy, so you just need to increase the limit high enough to cover your furniture. If you don’t have a furnished rental, you can still carry a small amount of personal property for appliances and other things you might be keeping at home.

Keep in mind that the amount and type of additional coverage vary from insurance provider to insurance provider.

Long-Term Rental Insurance

Typically called “landlord insurance” or “rental property insurance”, these dwelling policies are intended for people who rent their homes to others on a long-term basis. New landlords often confuse landlord insurance and homeowners insurance, but there are key differences between these two policy types.

A standard homeowners insurance policy protects against building/personal property damage and liability, but it only applies when the property owner lives within the residence. If you’re renting the dwelling out, homeowners insurance won’t cover any ensuing damage.

A landlord may get by with buying a homeowner’s policy if the insurance company doesn’t know they’re renting it out to others, but when the company starts investigating the first claim, they will find out it’s being rented out to someone else, and they could deny the claim and cancel the policy.

Your standard landlord insurance policy will have similar coverages mentioned earlier: dwelling, liability, rental income protection, certain tenant damage, and structures other than the main dwelling, like sheds, detached garages, etc.

You can also consider additional coverages, like an umbrella policy, which provides extra coverage in addition to what’s covered by landlord insurance. 

When it comes to selecting the right type of insurance for your needs, you need to know what is covered and what these policies do not cover. The only way to know that for sure is to read the terms and conditions of the policy you are selecting. This can vary from one policy and one insurer to the next; however, some of the most important exclusions to landlord insurance include the following:

• The tenant’s property. Most policies do not cover the tenant’s property, and many landlords require or encourage renters to obtain their own policy for these items.
• The tenant or landlord’s car. The same applies here, as the tenant should seek out their own coverage.
• Landlord insurance does not cover repairs to major systems.
• It does not cover damage caused by the property owner, such as if a property owner causes damage to the rental itself.
• It does not cover anything that stops working due to normal wear and tear or a lack of maintenance.

Long-term landlord insurance typically costs around 25% more than traditional homeowners insurance. An average policy price is around $1,070 nationwide, dependent on a number of factors, including geo-location, property condition, replacement cost, etc. 

Conclusion

To learn more about short, mid, and long-term rental property insurance, visit Steadily.com to get a commitment-free quote. Steadily has a team of landlord insurance experts who can provide licensed guidance on insurance for rental property owners.

This article is presented by Steadily

Steadily is America’s best-rated rental property insurance provider. Get coverage online in minutes for all property types and all policy durations, including short-term rentals. Visit Steadily.com to get a free quote today.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

When the weather warms up, it’s a good time to clean out the nooks and crannies and not just the ones in your closet. Every year, you should take a step back, evaluate your processes, take care of your business “housekeeping,” and set new goals. 

You’ve just paid your taxes, so getting organized for next year is top-of-mind. If you want to take this opportunity to give your real estate business a refresh, we’ve prepared a checklist of items to address in your spring cleaning efforts, with tips from two real estate investment advisors. 

10 Tips for Spring Cleaning Your Real Estate Business

Organize and digitize your files

If you want tax season to go smoothly next year, you can’t keep your business documents in a stack on your bedside table. Consider setting up a digital system to keep yourself organized. “I would definitely use a cloud-based bookkeeping software with automatic expense categorization,” says Riley Neilson, Strategic Real Estate Investment Advisor at Real Estate Bees. At the very least, digitize your records and receipts with a mobile app like Genius Scan and separate documents into folders where they’ll be easy to locate. 

Declutter your office and email inbox

Neilson says to consider using powerful spam-blocking software like Edison to clean up your email inbox. And give your physical space a little TLC as well. Too much clutter can increase anxiety, reduce focused attention and productivity, and even negatively impact your health, research shows. 

Schedule spring maintenance for your properties

“Schedule a maintenance check-up on your properties to address any repairs or issues that may have arisen over the winter. This can help keep your properties in good condition and minimize future repair costs,” says Armstead Jones, Strategic Real Estate Investment Advisor at HouseCashin. For example, you should:

• Inspects roofs, chimneys, foundations, and exteriors
• Inspect attics and basements
• Clean the gutters
• Clean and service A/C units and furnaces
• Reseal exterior woodwork
• Wash windows and clean weep holes
• Trim landscaping overgrowth and rake lawns
• Change the batteries in smoke and carbon monoxide detectors
• Seal any leaks and clean clogged drains

Reevaluate your business expenses

It’s a good time to think about your business expenses and see if there are ways you can cut costs. For example, you should:

• Get new landlord insurance quotes: It’s a good idea to collect a few new landlord insurance quotes annually since premiums can change, and new companies may emerge that offer better options
• Look at where you’re keeping your cash: Make sure to take advantage of today’s generous APY offers on high-yield savings accounts, so you can maintain a strong cash position while growing your money. Some online financial institutions are offering 4.00% APY or higher. 
• Consider a new business credit card: It’s a good idea to evaluate new business credit cards every two years. See if you can earn a bonus or get better rewards or features than you’re getting with your current business credit card. If you’re working on remodeling, repairing, or furnishing a new property, take advantage of deferred interest offers on some business credit cards. 
• Look for ways to trim your expenses: These can include working with your CPA on a new tax strategy, refinancing mortgages with high interest rates, appealing your assessments when property taxes increase, or increasing the energy efficiency of your properties. 

Explore new revenue streams and maximize your income

Take another look at rental comps for your area and consider increasing rents on lease renewals. Or, consider whether you might change your income strategy for your current properties. 

For example, if there are more digital nomads coming to your city than ever before, would it be advantageous to switch from a long-term to a medium-term strategy after your current tenants move out? Similarly, if you’re facing too much competition on Airbnb and high vacancy rates, might a long-term, furnished rental serve you better? If you added a kitchenette in a property with a separate basement entrance, could you rent it out as two units? Could you capitalize on the co-living trend and rent out each bedroom of a single-family home separately? 

Look at diversified ways to invest your profits and use your skills to create new revenue streams as well. If you’re an experienced investor, can you take on consulting work or mentor others in the industry? Keep an eye out for possibilities. 

Evaluate and check in with your business relationships

Consider whether the people you work with are living up to your expectations. Look at whether you need new property managers, maintenance people, or cleaning crews. If you’re not happy with your real estate agent, consider looking for a new, investor-friendly agent. And check in with the business relationships you intend to keep. 

Neilson says you should meet with your CPA a couple of times per year. “They can control the trajectory of your business so you don’t have any surprises when tax season comes,” he says. You’ll also want to make sure your attorney and accountant are on the same page. He also recommends meeting with your board of advisors, even if you have an LLC. If you don’t have other decision-makers in your business, “it can put your assets at a pretty tremendous risk,” says Neilson. 

Set goals for the year

Understand your strategy so you can set (and crush) your goals. Jones recommends setting “specific, measurable, achievable, relevant, and time-bound (SMART) goals for the year.” Then, break up your goals into more manageable chunks. “I try to break up my goals 90 days at a time,” says Neilson. “If you set smaller goals over shorter periods of time, that helps keep you motivated.” 

Refresh your brand image and marketing tactics

“Review your marketing strategies and brand image to ensure they align with your current business goals and target audience,” says Jones. “Consider updating your website, social media, and marketing materials to reflect any changes.” In addition, update your blog content and optimize your website for search engines. And make sure your listings are still accurate and highlight the benefits of your properties. Neilson says it’s a good time to scrub your email list of inactive and temporary emails as well, which can reduce your marketing costs. 

Research new opportunities

Jones recommends keeping an eye out for new investment opportunities in the market. “This could include attending industry conferences, networking with other professionals, and researching market trends and emerging neighborhoods.” You might also look into bootcamps and webinars to address gaps in knowledge that prevent you from maximizing your success. As you network with other professionals, keep track of your communications with Customer Relationship Management (CRM) software to help you stay organized and reduce your liabilities, Neilson suggests. 

If you’re evaluating new markets, especially as an out-of-state investor, just bear in mind that selling activity ramps up in the spring, Neilson advises. Look at metrics over the past year when evaluating new opportunities rather than comparing a new spring market to your current winter market. 

Refine your processes

Evaluate your current processes, and look for areas where you could improve your efficiency, with automation or digital tools, for example. If you want to free up more time for yourself to take on new opportunities (or just enjoy the warmer days), consider hiring help or outsourcing some of your current tasks. Jones also suggests using project management software. This can be especially helpful if you manage several properties and want to track lease agreements or delegate responsibilities to team members and keep everyone on the same page. 

Bottom Line

We’ve all seen what can happen to a physical space when you let things slide—those dusty piles of clutter can get in the way of productive work. The same thing can happen with your mindset, processes, and goals. 

Whether you set New Year’s resolutions or wait until spring to deep clean your business practices, you should take some time each year to get organized, ensure your strategies align with your goals, eliminate unnecessary time and money costs, maintain your properties, and check in with other members of your team. Spring cleaning your real estate business now will allow you to enjoy uninhibited growth in the future.  

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

After a long economic winter of high inflation, flatlining growth and persistent labor shortages, Britain’s small business community is looking ahead to the remainder of 2023 with a certain degree of optimism.

But – and this is quite a big but – the tough trading conditions that have characterized the U.K. economy since the beginning of the Covid pandemic have left scars. Entrepreneurs may be looking forward to better times but many of them are also struggling with confidence issues. In practical terms, spending on marketing, recruitment and digital skills has been pared back or suspended by some businesses. And according to a new report published by Small Business Britain in collaboration with Clearpay and Square, this could impair future growth.

The report is based on responses from around 1,000 small businesses across the United Kingdom. More than half are one-person bands and around 35% have 2-9 people on their payrolls. Only a handful have more than 40 people working for them. In other words, the survey was aiming to tap into the sentiment of those companies that are often described as the “backbone” of the U.K. economy while receiving relatively little attention.

Christmas Woes

At first glance, the outlook for these companies seems relatively positive, with just over 61 per cent expecting to grow in 2023.

But the devil is in the detail. For consumer-facing businesses, Christmas is a crucial time of the year. But for many, the 2022 festive season – the first of the post-Covid era – was a disappointment. Ten percent reported poor trading and more than 30 percent said it was not as good as usual. Companies that can ramp up revenues in November and December are much better equipped to deal with difficult conditions in the year ahead. Poor Christmas sales remove an important cushion.

Storing Up Trouble

But the report’s authors are more concerned about a downturn in investment. Almost a third of businesses have delayed marketing spend and 27 per cent have cut it. Hiring has also slowed.

So are Britain’s small businesses storing up trouble for the future? Small Business Britain was established to be a champion and voice for small businesses. I spoke to founder Michelle Ovens, CBE. firstly asking how she would sum up the mood of the companies taking part in the survey.

“There is a general consensus that conditions are tough, but they are pressing on anyway,” she says. “Everyone feels how tough it is, but there are signs of optimism.”

But Ovens expresses says cuts in marketing could well be an own goal.. “You cannot stop marketing,” she says.

True, but it’s perhaps understandable that some businesses – actually quite a few – have looked at the trading conditions they face and concluded that spending needs to be reduced, with marketing as an obvious contender. Unlike wages or other fixed costs, it is something you can flex up and down.

That’s something Ovens acknowledges but she urges cash-strapped small ventures to consider how marketing can be done more cost-effectively. “Companies can invest time rather than cash,” she says.

One way to do that is to turn to digital technology – social media being a case in point – to reach customers without having to spend huge amounts on advertising or traditional marketing campaigns.

But the survey also detected cutbacks in the willingness of business owners to invest in getting to grips with digital tools. That’s not necessarily a problem if you are already – for example – a bit of a whiz kid when it comes to social media engagement or making short films for Tik Tok – but not everyone is. Ovens says business owners need to brush up on their own digital skills: “Many entrepreneurs’ digital skills were frozen in time when they left their previous employment to set up a business.”

Ovens stresses adopting digital technologies – and not just in marketing – doesn’t have to be expensive. There is cheap or free software and online courses available. But it does require commitment and time.

And it’s not, as she acknowledges, a silver bullet. TikTok videos or a Facebook campaign won’t work for everyone. “But we would urge people to give it a go,” says Ovens. The results can be impressive.

A Confidence Deficit

Perhaps the bigger issue here is confidence. If a business has been bruised and battered by a combination of Covid, inflation and consumer belt-tightening, owners can lose faith in their own ability to make sales or even good decisions. Ovens says there is a danger that when decisions are made, the driver is panic rather than good strategic thinking.

And confidence can be a fleeting thing. Hard won and easily lost in the face of adversity. “I hear people saying things like “I have lost my mojo,” says Ovens. “But we’re talking about people and we all have our moments.”

So, what is to be done? Ovens recommends seeking out a mentor. Equally important, finding a “tribe” can also be helpful. Other business owners and advisers who can provide mutual support and trade information. More fundamentally, even taking a break can be helpful. Going for a walk or taking time out to consider the bigger picture.

The report also recommends taking steps to build resilience, with the creation of a new business plan a good first step.

The optimism – albeit self-declared – among small businesses is good news but with trading conditions still tough, many will focus on day-to-day survival rather than long-term growth planning. That could create problems further down the line.