Online Business Trends in 2023: Why Entrepreneurs Are Bullish on Growth This Year

By Blake Hutchison

Small business owners are facing a climate of economic uncertainty, with high inflation, a volatile stock market, and rising interest rates, but one area of the small business economy is showing strong signs of confidence: online business.

Entrepreneurs of “Main Street”-sized online businesses—e-commerce, mobile apps, blogs, and other online businesses—are still growing well. These business owners are typically more nimble than their brick-and-mortar cousins, and are well-placed to react in the event of a downturn. Couple that with a burgeoning online business M&A market and there’s reason to be bullish.

What are the other 2023 themes and trends in online business?

Online business owners will continue to invest for growth

My company conducted a survey of online business owners and found that 56% of digital entrepreneurs see the current market conditions as an opportunity for growth; 40% say they are “bullish” on the economy with only 25% saying that they are “bearish.” This is a sign that, beyond the headlines about Big Tech layoffs and uncertainty on Wall Street, many online business owners are projecting growth in 2023.

There are a few big online business trends for 2023 that are likely to make this a good year for digital-first entrepreneurs, even if other areas of the economy are going through some tough times:

• Online businesses can pivot to new business models. Small business owners can easily experiment with new ways of earning revenue, like a subscription-based newsletter or offering an expanded range of products and/or services. One advantage of running an e-commerce store or other online business is that you typically have a captive audience. Expanding the range offers real possibility of diversifying revenues. This can be achieved without substantial additional overhead. A 20% lift in AOV (average order value) with a checkout-based add-on can be a strong growth lever.

• Online businesses can go deeper into niche markets. Online businesses are often better when they go after a niche and customers will often appreciate a business with deep ties to a particular niche or category. There’s an assumption that they are specialists. Like every year, trends, fads, and movements spawn new segments of businesses. Pickleball court review site, anyone?

• Online business owners can work from anywhere. The rise of remote work during the pandemic is not going away, and online business owners are the biggest winners from this new way of working. What if you could save money by moving to a lower-cost area, or see the world by becoming a digital nomad? Location no longer matters! Now that’s something to remain positive about.

There is strong momentum and continuing growth potential among small digital businesses. Even if the big players like Amazon, Meta, Google, and other incumbents are laying off talent and cutting back on investment, tens of millions of online business owners are still positive and growing. Our survey also found that, when asked to share their personal golden rule of entrepreneurship for 2023, 36% of digital business owners said, “Invest for growth. Now is the time to place a bet.”

Deeper customer relationships are critical for online businesses

Although online business owners are bullish on the economy, inflation is still taking a toll. When prices rise, some customers cut back on spending, leading to lower revenue or smaller average orders for your business. One strategy for online small businesses to counteract these inflationary forces is to try to deepen the business’s customer relationships, with better cross-selling and long-term customer retention.

For many online businesses, content marketing is the best way to build their brand identity and form stronger customer relationships. Content marketing is powerful, because it enables your business to “own” more of your audience and generate inbound website traffic. Instead of spending money on traditional advertising that just lets you “rent” someone else’s audience, content marketing can help keep those customers coming back to your website and your social media channels for the long-term. This can be a cost-effective strategy to retain and attract more customers.

Content marketing is often the go-to solution for online businesses. It works for e-commerce and SaaS businesses, and is obviously the lifeblood of a content-based affiliate or advertising-backed website.

Anything your business can do to create a stronger brand identity and inspire a sense of community with your customers will help drive customer loyalty, long-term retention, customer referrals, and repeat sales.

Even in times of economic uncertainty and high inflation, online businesses are well-positioned to pivot and respond to changing circumstances in agile ways. Strategies like content marketing can help small business owners to better understand their customers and deepen relationships with their customers. And this is another building block for future growth.

Growth-by-acquisition: a growing trend for online businesses

One growing trend for online business owners is to acquire another business. For online business owners who know their industry vertical well, finding another related business or website to acquire can be a way to quickly ramp up their growth, while broadening their base of business.

There are also larger investors entering the space and looking for bolt-on acquisitions. Don’t be surprised if there’s a knock at the digital front door: Have you considered selling your business? In recent years high net worth and institutional investors have moved downstream and are buying up, mirroring the practice of traditional private equity. We’re seeing tens of thousands of new buyers enter the market monthly. It’s a trend and it’s having a positive impact on the collective.

The rise of digital small business M&A among larger investors is another sign that this space is maturing and becoming more attractive. It’s exciting to think that every online business owner can work their way to an exit. Digital small businesses like websites, blogs, e-commerce stores, mobile apps, SaaS solutions, and other digital assets are making real money and delivering consistent, sizable returns to acquirers. Especially after the excessive hype and drawdowns of some other asset categories, the digital small business space looks poised for continued growth and ROI.

FAQs about online business trends

Below we have summarized the most important questions and answers on the subject.

About the Author

Post by: Blake Hutchison

Blake Hutchison is the CEO of Flippa, a marketplace to buy and sell digital small businesses, such as websites, e-commerce stores, mobile apps, and SaaS businesses. Blake has worked on leadership teams assisting in fast-growth businesses, including Xero and Luxury Escapes. Among his startup experience, he also founded a company, and then he used Flippa to sell the business.

Company: Flippa
Website: www.flippa.com
Connect with me on Twitter and LinkedIn.