New Years Predictions: 6 Trends That Will Impact Small Businesses in 2015
by Margot Carmichael Lester, Staples® Contributing Writer
What does the New Year have in store for small business owners? We asked a few pundits to predict the trends that may affect your small business in 2015.
Trend 1: Social Responsibility
Purpose-driven business or conscious capitalism is a continuing trend and companies large and small have been thinking, and I believe will continue to increasingly think, beyond profit, says business and personal coach Phil Holcomb, co-founder of Extraordinary Learning in Seattle. An August 2014 survey by Lab42 found that 57 percent of consumers believe organizations are more socially responsible than they were three years ago, and 84 percent of respondents indicated they were willing to pay more for a product or service from a company they felt was socially responsible.
Small Business Impact: Being a company that does good for its employees, customers and community is a smart and effective focal point, Holcomb continues. I think that in this era of social media, a company that is solely a bottom-line entity will lose good employees, good customers and goodwill. While some of the too big to fail companies may withstand this type of negative public opinion for some time, small businesses do not have the reserves to pivot and rebuild their reputations.
Trend 2: Big Data
So-called big data will continue to be a key basis of competitive analysis, underpinning new waves of productivity, growth, innovation and consumer behavior, says Linda Henman, president of Henman Performance Group inChesterfield,MO. In 2013, 9.2 percent of small organizations used business intelligence software, up from 1.7 percent in 2010, according to data from a 2014 IDC report.
Small Business Impact: Now, small companies can buy sophisticated analytics tools for very little money, and sometimes these smaller companies can absorb and exploit these technologies faster and better than larger organizations can essentially leveling the playing field, Henman says. Whether the organization is big or small, it will all come down to one thing: the rate of ROI in these technologies is only high when implemented correctly.
Trend 3: Economic Constraints
Federal budget constraints will impact both federal and commercial sectors, forcing focused alterations to business models and execution strategies, predicts Brad Williams, co-owner of The Alternative Board in the Washington, DCarea. Not surprisingly, an October 2014 NFIB study of small business attitudes saw a 5-point decrease in the percentage of owners planning capital expenditures in the next three to six months, down to 22 percent.
Small Business Impact: With a tighter budget, small businesses will need to decide where they can save and where they can spend, Williams says. Owners will need to seek out additional forms of funding or develop consistently leaner operations, including a remote or outsourced employee base. Develop opportunities for outsourcing work to other businesses. One business owner's overflow is another business owner's paycheck!
Trend 4: Local Funding Options
Instead of putting their investment dollars in big, distant companies, people are increasingly investing in businesses in their neighborhoods through direct loans, crowdfunding or direct public offerings, notes Anna Ghosh, director of communications and marketing for BALLE (Business Alliance for Local Living Economies) in Oakland, CA. As a result, the Fall 2014 OPEN Small Business Monitor showed that 79 percent of business owners felt confident they had access to the funds required for growth.
Small Business Impact: This is great news for small businesses that have had difficulty getting traditional financing since the 2008 financial crisis, Ghosh explains. Consumers are increasingly interested in divesting from Wall Street and investing in the businesses right next door. Small business owners should take advantage of this not only as a way to increase capital but to build strong personal relationships with their neighbors.
Trend 5: Coworking
Coworking has expanded far beyond incubators, key-man space, downtown revitalization and sector-specific shared facilities, says Monica Doss, chief knowledge officer of Flywheel, a coworking space in Winston-Salem, NC. The number of coworkers nationwide increased by 117 percent from 2012 to 2013, according to data from a December 2013 report by the NAIOP Research Foundation.
Small Business Impact: Part of this is a generational and work-style shift, she admits, but its also the evolution of new coworking spaces that focus on affordability, productivity, comfort and solid amenities, while encouraging a sense of community and peer engagement that you dont get in an office building, home office or coffee shop. In short: If you want to start your own business nowadays, you no longer have to make a go of it on your own in your home.
Trend 6: Learning and Support Resources
There is an explosion of learning opportunity in todays world, from free university courses on the Web to information about any subject, including business, Holcomb says. There also are more in-person or one-on-one personal development and support programs designed to help small businesses thrive. The 2014 Corporate Learning Factbook found that American businesses increased spending on training and continuing education by 15 percent in 2013, the highest rate of growth since 2006. Research from the same group found that more than 70 percent of businesses were considering MOOCs (or Massive Open Online Courses) for training.
Small Business Impact: Take advantage of the richness of resources and study lessons learned, Holcomb adds. Doing this promotes innovation and, if not new, at least fresh ideas. Learning is one way to mitigate uncertainty. And, one area of extreme importance is learning about self. It has long been decided that everything else being equal, the person with the highest level of emotional intelligence rises to the top.
Which of these trends will have the most impact on your small business? How can you capitalize on them to be more successful? Put some time into developing your answers and position yourself for more success in 2015.