This week is National Small Business Week, which recognizes the critical contributions of America’s entrepreneurs and small business owners. Throughout the week, the U.S. Small Business Administration (SBA) is sharing small business success stories and hosting expert discussion panels about the small business landscape and emerging trends. Here are some of the top small business trends being discussed during National Small Business Week:
Increased Lending Options
Managing cash flow is a top priority for small businesses, and more and more of them are turning to online lenders in response. Online lenders provided an estimated $7.9 billion in small business loans last year, up 68% from the year before, according to Morgan Stanley. When compared to traditional bank loans, online lending has a more convenient application process, faster delivery of capital, and (according to this Harvard Business School paper) a greater focus on customer service.
On the other side of the coin, during a SBA panel discussion this week, Vice President of the Federal Reserve Bank in Atlanta, Todd Greene, gave his opinion on the trend. He agreed that online lending is something business owners are turning to more often, but due to the repayment terms and high interest rates, they aren’t as happy with the options when compared to other types of lending. “Quick and easy doesn’t mean it’s the best thing for your business,” he stated.
Other options that are gaining popularity include crowdfunding and payment processor-based loans. Whichever type of lending you decide is right for your business, keep in mind that transparency is key. As a small business owner you should fully understand what you are committing to prior to signing on the dotted line.
When demographics shift, opportunities are created; and there are currently two major shifts underway that are influencing the way business is done in America, according to the SBA. First, baby boomers, or the group of people born between 1946 and 1964, are the nation’s second largest living generation, overtaken only recently by millennials (those born in the early 1980s to mid- to late 1990s). As more and more baby boomers enter retirement, business opportunities open up, both for the baby boomers themselves who want to keep working (but on their own terms), and for the businesses that want to market to them. This shift is causing a dire need for more personal care givers, retirement homes, elderly travel accommodations, and technology solutions.
Also, as more baby boomers exit the workforce, more millennials enter it. This transition, along with emerging technology, is eradicating the typical nine-to-five work day and replacing it with more flexible schedules, remote work options and freelancing. Huffington Post refers to this shift as the “Uber economy.” This younger generation is also keen on certain technologies in the workplace, and they seem to prefer a more relaxed management style, while also placing more value on flexibility verses higher pay.
Small businesses should keep demographic shifts in mind when brainstorming product or service offerings and go-to-market strategies. These shifts may also influence decisions on investment opportunities, and how to adjust to the changing workplace.
Multiple Technology Solutions
U.S. businesses that survived the country’s recent economic downturn came out leaner and more efficient, and more dependent upon technology to leverage their limited capital. One of the ways more businesses are doing this is through eCommerce. Consumers value convenience, and over the past decade eCommerce has grown 17%, totaling a $220 billion market in the U.S. In addition to offering products and services in online stores, more small businesses are:
- Utilizing Cloud applications for efficiency, easy access, and security measures
- Deploying Unified Communications solutions to cut costs and foster collaboration among dispersed workforces
- Relying on social media marketing to create brand awareness and reach potential customers
- Exploring open source applications
- Optimizing their websites for mobility & improving website visitor tracking/analytics
- Starting blogs to increase searchability and establish themselves as industry experts
Small business owners need to stay on top of technology not only to sell more and grow, but to discover solutions that will save them time, effort, and money.
Additional trends to keep an eye on include:
- Software as a service (SaaS) will continue to replace legacy providers, including bookkeeping, consulting, and payroll services
- A rise in small business exporting due to free trade pacts and easy access to international representation online
- An attempt to stay under 50 employees due to the Affordable Care Act. This will also give rise to freelancing and remote consultants
- Increased cyber crime, and increased cyber security services
Follow all of the trends from National Small Business Week on social media using the #DreamSmallBiz