Top 10 Small Business Trends in 2014

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R.E.M. once sang “Change Is What I believe in.” That has to be the credo for small business owners.  Here’s what’s on tap for 2014.

1. Certain uncertainty

The economy is always in flux, and political changes overseas don’t help anything. Ripple effects from the Affordable Care Act only add to the uncertainty.

2. Increasing competition means more focus

Some of the major retailers, including Amazon and Wal-Mart, are adapting and offering an unprecedented battery convenient services such as increased personalization, same-day delivery. This means the table are turned and it is now small businesses that will have to adapt.  Here are some strategies: offer a highly-specialized or customized product or service, focusing on an tight niche, building an engaged community of customers, and cooperating with other local businesses to save expenses and cross-promote.

3. Using virtual assistants and contractual workers

 The small business community as a whole is hedging its hiring plans. According to the February 2014 Small Business Economic Trends survey, just 12% of respondents reported plans to hire in the early part of the year.  One reason for this is that respondents answered that the net economic conditions over the next six months would be worse.

When there isn’t the optimism to consistently hire at a growth rate, the demand for VA’s and contractual workers rises.

4. Difficulty attracting talented employees

There’s plenty of talent out there, but it’s hard to snag for small businesses.  Particularly in tech fields, the talent is going to big companies in a rich-get-richer scenario.  Talented employees have no more reason to be optimistic about the economy than business owners do, and signing up with a small company can appear risky.

5. Possible Raises of Minimum Wage

The city of Seattle just approved a hike of its minimum wage to a slightly dramatic $15.  This particular raise is actually good for small businesses, because it affects only owners of large businesses.  We’ve seen McDonald’s employees clamoring for raises in the minimum, usually involving an increase along the lines of $14 or $15 per hour.  Small business owners need to be up to date on laws in their state or city, even before the laws pass.  Some hikes will apply to them and some won’t, and planning accordingly, taking into account all the strategic factors, is key.

6. Need for Rep Control

Consumers are increasingly empowered to share their opinions, thanks to online product reviews, social media and viral video both good and bad, about the products and services they use. This means that small business owners must be vigilant in monitoring their online reputations.

7. Mobile business monopoly

The developing trends in mobile business include  mobile marketing, mobile payments, and mobile-friendly devices. These demand responses from small business owners–tools and services are out there and relatively affordable.

In addition to using these technologies, there’s the matter of linking them to customer interactions, by linking mobile payments, mobile marketing, and location-based services, to customer loyalty programs.

8. Skepticism Toward Social Media

Social media have been around for a while now.  Many small business owners are aware of tools and metrics for quantifying the ROI of particular social marketing campaigns.  In 2014, we’ll probably see small business owners mounting a backlash and getting rid of social marketing campaigns that don’t work.  Two to three years ago, you were a dinosaur if you weren’t using social media.  We’re now reaching the other end of that cycle, in which people are stepping forward and admitting to unacceptable ROI when these are the case.

9. Visually-simple web designs

You’ve probably noticed spare web designs, with few frames and many pictures.  We’re also seeing increasingly- sophisticated data visualization, the process of turning complex data sets into easy-to-understand visual material.

10. Growth of alternative finance

Scrappy small business owners will, in the last months of 2014, continue to turn to alternative financing, such as microloans, , peer-to-peer lending, accounts receivables factoring and crowd funding, to help regulate cash flow and sustain growth and expansion.

So, there you have the top trends for the balance of the year.

6 Comments

  • I always thought social media was over rated. Having X number of followers is no guarantee of quality of the traffic you’ll be attracting, if any at all. There is a lot of noise on Twitter, but none of it appeals to me as being particularly “good content”.

    • Aiqus says:

      I think it really depends on the quality of those followers. Having X number of people connected to your account can generate a tremendous amount of traffic if you have a made an effort to build quality connections with these people.

      • Indeed. If you’re tweeting about anything and everything I would regard it in the same way I would if a crazy person was standing in the street shouting random nonsense. No body is going to respond. If you’re saying useful things, and people choose to follow you, it’s going to be easier to build that relationship.

        I think a lot of people “working” Twitter forget this and believe that sales is a numbers game and hinges on how many people are exposed to your product/service/message.

        But when we talk about sales “being a numbers game” we’re usually referring to a salesperson making (or least attempting) a real human connection, not just broadcasting.

  • Dylan Loh says:

    I agree with Adam. Social media is not (and was) over rated.

    An example: You can easily add a few hundred (worthless) supporters to your facebook fan page for $5 on fiverr but if you can build a few hundred willing and loyal likes on your fan page, that’s a whole different ball game altogether.

    • Aiqus says:

      The minute any individual or business forgets about the people behind those social media accounts, follower, and subscriber lists, that’s when they go off. If you see your followers and subscribers as mere numbers, then purchasing a few of them makes sense- you just got what you paid for. But, if you put a value on the relationships you can build with these people, you’ll get back so much more.

  • I like your prediction that increased competition will mean more focus. I believe that small business offers a level of service, quality, and convenience that no big-box retailer can ever truly compete with. The most successful small businesses have always been the ones that can truly laser-focus on a niche market to create a loyal customer following. I also think that increased competition is relevant for no. 9: Alternative financing will continue to grow. As alternative financing grows, the cost of capital is driven down by competition. This is great news for the small business owners who need as many flexible financing options as possible. I post a lot of great articles about small business financing trends via Twitter (@receivables). Great post Adam!

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