In planning for 2019, many leaders appear ready to seek acquisition targets or expand organically through new locations or market territory. While they are still focused on efficiency and improving the performance of existing systems, there is an indication of more focus on top-line growth and investment.
As indicated earlier in the Business Outlook Report, anticipated capital spending is up. Growth through acquisition, a new facility or new location is noted by 27 percent of leaders as a business strategy for 2019, up from 9 percent just 12 months ago. Small and middle-market businesses may research the advantage of an acquisition/merger opportunity to compete. About one-third of leaders are specifically open to or anticipate, a merger or acquisition in the coming year. Another 12 percent of leaders are considering selling or being acquired.
The sales strategy for products and services remains the same from a year ago. About 34 percent of respondents plan to roll out new products and services to either existing or new markets in 2019. About 65 percent of leaders will focus on promoting existing products and services to existing or new markets. About 8 percent of leaders anticipate increased pricing for products and services. The big innovators appeared to be in healthcare and manufacturing, but there are also new products and services planned in professional services, retail and technology.
More than half of leaders are focused on improving margins and revenue through higher productivity and efficiency. However, greater than 43 percent report investments in technology solutions, focusing specifically on business intelligence/analytics, enterprise resource planning (ERP) and core operating solutions including cloud strategies. Due to plans to increase compensation and benefits, only 8 percent of leaders anticipate the ability to decrease operating expenses. Almost 20 percent of leaders are concerned about the risk of increased raw materials costs.
“We expect to increase spending on recruitment. The need for talent is significant, and we want to build the greatest team.” CEO/President, Financial Services/Banking
COMPENSATION, TRAINING, AND FLEXIBLE WORK
When it comes to retaining top talent, increased compensation is the incentive of choice for 41 percent of companies, up from 29 percent of companies in 2017. Training and development is also up slightly, cited by 23 percent of leaders, compared to about 21 percent of employers last year. Flexible and remote work arrangements remain popular, cited by 23 percent of leaders.
About ¼ of c-level business leaders use online research and purchasing options.
MARKETING AND R&D
Besides increased investment in new capital equipment and talent, about 18 percent of leaders continue to focus on marketing and research and development, while 21 percent have reinforced their intentions to invest in new locations, facilities and acquisitions. When searching for the best business capital investments, 25 percent of companies are seeking customized products and information that fit their specific needs. One-third of leaders also emphasize the importance of referrals. More than 19 percent pay attention to thought leadership or case studies of products and services, likely due to higher mobile device use and apps, while more than 13 percent are increasing their personal use of cloud-based services.
Data indicates that online information and case studies influence buying decisions, and customized information and products have an edge. One-quarter of C-level leaders are conducting self-directed research and automated transactions prior to interfacing with company or sales representatives.
While there are positive expectations for 2019, the U.S. is unlikely to see the strong pace of growth transfer from 2018, according to Bruce Yandle, dean emeritus of the Clemson University of Business and Behavior Science. Prepare to make the most of 2019 by planning ahead. Focus on innovative ideas through R&D and research acquisition or merger opportunities for continued business growth. Does your strategy align with other business leaders in 2019? The Business Outlook Report contains a range of information that can help businesses plan for 2019 and beyond.
View the entire 2019 Business Outlook Report here!
Suzanne Reed is the Director of Marketing at LBMC. She has more than 20 years of experience in the financial services, professional services and payments industry. Contact her at 615-309-2282 or firstname.lastname@example.org.