Florida surpassed New York to become the third most populous state in 2014, according to the U.S. Census Bureau. The state's new residents are a boon to Florida's economy, who are bringing with them workers and a demand for housing. One population was noticeably absent, though, until recently: the over-55 retirees who migrate south to live out their golden years, who are working later into their lives and struggling to save money following the Great Recession. Today, that trend is reversing, with the number of adults ages 55 and older moving to Florida, Georgia and South Carolina tripling since a low in 2009, according to a report by TD Economics, the independent research arm of TD Bank.
This is especially good news for Florida's more than 2 million small businesses, which continue to expand. In fact, TD Bank's Florida Small Business Pulse Check survey of more than 300 small business owners in Central and South Florida named the growing retiree population (26 percent) and the expanding general population (43 percent) as the greatest opportunities for their 2017 operations. Small businesses in the health care, construction, finance, retail and restaurant sectors especially stand to gain, reports TD Economics, and increased demand for services will boost payrolls and revenue in these sectors.
With this in mind, here are three ways small business owners in Florida - and throughout the South - can capitalize on their states' growing popularity.
Adjust the business model
Forty-three percent of respondents in TD Bank's Pulse Check stated they anticipate increasing revenue/sales in 2017 and 35 percent will expand their product or service offerings. Before embarking on ambitious plans, business owners need to review and refresh business plans and models. First, carefully examine the books to get a view of cash flow over the past 12 months. Businesses that rely on snowbird or tourist traffic especially need to determine their peak and leanest months. Understanding this revenue cycle will help owners create a cash flow strategy to sustain operations through leaner months, including stretching savings, adjusting owner profit takes or salaries, or obtaining a line of credit.
Once the financial picture is clear, review the business' operations. Are you well positioned to best serve your target market? Can you adjust hours, services or other operations to better accommodate their needs? A thorough assessment can show the organization's shortcomings and opportunities, and allow for changes that will mean profiting from your ideal customer base.
Consider a seasonal staffing approach
Adding employees is not an easy decision for a small business owner, who often monitors monthly revenue and expenses with a bit of trepidation. Seasonal staffing models aren't just for stores at the mall during the holidays - they can be advantageous for the 21 percent of small businesses who stated that tourism and seasonal residents are an opportunity in TD's Pulse Check. More employees, even if on payroll for a few months at a time, can turn into revenue growth, especially for the service industry. If bringing on a long-term employee isn't yet viable (just 10 percent of business owners in TD's survey said they will hire in 2017), consider seasonal staff. This will allow the business to capitalize on peak periods of revenue while trimming expenses in leaner seasons.
Take advantage of real estate prices and rebounding regions
A population influx - whether permanent or seasonal - is creating higher demand for real estate and helping some hard-hit regions recover from recession lows. This bodes well for businesses in the construction and real estate sectors, but also means that any business owner can take advantage of climbing real estate prices. A more active market (but below peak) means rents will remain competitive and opportunities to invest in real estate. Expansion or investment in permanent office space, coupled with the continued low (but rising) interest rate environment, will be a major opportunity for business owners in 2017. Take time to scout up-and-coming areas as well as established neighborhoods and lease or buy space in the area that will provide the best foot traffic or referral sources for your business type.
The growing population will benefit Florida small business owners if they know how to best take advantage of the economic factors impacting the state. As local markets evolve over the next several years, making changes in operations and strategy now will help more small businesses not just keep the doors open, but prosper.