I hold the opinion that the external backup drive for any desktop computer should be a desktop-class drive with an independent power supply. I have enjoyed amazing service with self=powered externals that held quality 3.5-inch drives; not so much with the cheap bus-powered drives that use 2.5 inch laptop drives.
I offer these recommendations for any external used on a Mac based on my Mac use, support or others' Macs, and some misteps in my youth:
1) Use Disk Utility to erase and reformat the new external drive to a pure Apple format. Your 2023 iMac uses APFS.
2) Do NOT install the drive software that comes with many "name-brand" external drives.
3) External SSDs are overkill for backups once the first backup is completed.
I've been through a litany of external drive options—and grief—since we started with Macs nearly 35 years ago. Having been burned by too many cheap drives, today I use only these enclosures:
https://eshop.macsales.com/shop/owc-mercury-elite-pro
into which I install SATA 6G 7200 prm Western Digital Black Series drives.
Yes, more money, but I got over that quickly when I asked myself, "How much is your data worth?