Editor’s note: “Ask the Expert” is a small-business advice column written by Steven Strauss, one of the nation’s leading small business experts. His articles, which first appear each week in USA Today, offer business tips, hints, success strategies and ideas in answers to questions from readers. As part of an agreement with Strauss, his columns also appear in selected issues of Rental Management and our e-mail newsletter Rental Pulse. Should you have a question for “Ask the Expert,” please contact Strauss by e-mail at sstrauss@MrAllBiz.com.
It’s that time of year when I take my annual look at the “Top 10 Trends in Small Business.” One thing I am happy to report is that, unlike the last two years, the state of the economy does not dominate the list. Indeed, while the economy does make an appearance, it does not top the charts as it did in 2009 and 2010.
No, this year the dominant trends are far more about growing your business than staying in business. That is welcome news.
So here is my “Top 10 Trends in Small Business” countdown for 2011:
10. The Great Recession recedes. According to economists, the recession has been over for a while. Things will continue to get better economically in 2011. Now, this is not to say that things are peachy, clearly they are not. Unemployment is still troublingly high and business is not where it once was. That said, things are better and the evidence of this is all around. On the small business front, one reason things will continue to improve is the small business bill that became law in 2010. One benefit of that new law is that billions of dollars have been pumped into the lending pipeline, making it easier — though not easy, see below — for small businesses to get loans backed by the Small Business Administration. At an annual conference of SBA lenders last fall, it was predicted that the number of SBA loans would double in 2011.
9. New money. Even though SBA loans will increase, the tight credit markets over the past few years have forced small businesses to get creative when it comes to finding money to start and grow their businesses. Aside from traditional sources like friends and family, angel investors and partners, one new trend is the advent of online portals that foster group lending:
- The first is called peer-to-peer lending and it is as its name suggests: It allows individuals to lend to individuals. On peer-to-peer lending sites, entrepreneurs can post their business and look for people interested in lending money to that business. It is a new and interesting model, but not one without risks. Check it out carefully before investing or borrowing.
- The other is called crowdfunding. Crowdfunding occurs when you go to a crowdfunding site, list your project and get people to donate to your business or project in exchange for some reward. The reward is not a repayment of the debt. Instead, it is something related to the project. For example, I heard of one woman who wanted to fix her ship so she could sail around the world. She promised givers to her project a postcard from spots along her route. It worked.
8. Growth of e-marketing. After several years of holding steady, it looks like small businesses are looking to tap into the power of e-marketing to fuel growth. Surveys show that in 2011, a growing percentage of small business respondents plan to increase website marketing, e-mail marketing or social media marketing. E-marketing is hot.
7. The new localism. People are becoming increasingly aware that it makes economic sense on a lot of fronts to spend their consumer dollars not only locally, but at small businesses locally. Of every $100 spent locally, $68 is said to go back into the community in some way through taxes, payroll and various other expenditures, not to mention the support of local entrepreneurs and their employees. The new localism is taking many forms. Two obvious indicators are the growth of “buy local” campaigns and the surge in local farmer’s markets.
6. e-Boom. What if I were to tell you that there was one sector of the economy that grew at an 11 percent rate this year and that was on top of 11 percent growth last year? Those are amazing numbers, especially given the state of the economy the past few years. So what industry is growing at such a rate? E-commerce. There simply are few other places where the economy has an above 10 percent compound growth rate, equaling more than $250 billion in annual sales. As I always say, you gotta go where the eyeballs are and increasingly they are on e-commerce sites.
5. The rise of the mob discount. No, it is not just Groupon that I am talking about, but Groupon is a good place to start (see story on page 10). Groupon — or Group Coupon — offers incredible deals if a certain number of people sign up for the offer. If so, they can expect to get “50 to 90 percent off.” For the small business owner that participates, it is a double-edged sword. Yes, you can get a lot of traffic, but at what price? Does it work? Someone is using it. Groupon recently turned down Google’s $6 billion buyout offer. However, the new mob discounts go well beyond Groupon. Walmart is using Facebook to try something similar called the “CrowdSaver.” On Facebook, Walmart posts some potential great deal. If enough people “like” it, the deal then goes live and everyone gets the discount. Or consider the “flash sale.” By making limited-time offers available on Twitter and Facebook, businesses like Dell Outlet and the ice cream shop down the street create immediate sales.
4. Mobile marketing creates opportunity. How do people find out that the ice cream shop is having a sale if those folks are not already Twitter followers of that business? Mobile search. The proliferation of smartphones, iPads, netbooks and tablets means that consumers are increasingly searching for businesses on the go as much as they are while sitting at a desk.
So your small business needs to be present on mobile local search results and you also might consider creating geographic-specific mobile search ad campaigns. The next frontier in sales is going to be mobile searches and ads that result in on-the-go purchases.
3. The New Normal. Yes, I did say that the economy was not going to dominate my list this year and it doesn’t, but I never said it didn’t make an appearance and here it is: The long-term fallout from the Great Recession is that work has changed, forever. Businesses are looking to do more with less at less cost and will continue to do so. Working smarter and cheaper is one aspect of the New Normal. Another is that the days of full-time jobs with full-time benefits are ending. If you have one of those, count yourself lucky. Businesses will continue to cut costs by creating more part-time and independent contractor work. The good news for small business is that more contract work will be available.
2. It’s a Facebook world and we are just living in it. Evidence of the total and utter dominance of Facebook is all around us: Mark Zuckerberg is Time magazine’s Man of the Year. “The Social Network” is one of the top movies of the year. Facebook topped 500 million users. It is the very ubiquity of Facebook that has changed the business game. At a recent webinar I gave, someone asked, “Does my business have to be on Facebook?” Of course the answer is no, but Facebook is where the action is right now, so it would be dumb not to have a presence there. Whether it is having your own Fan page, learning how to advertise on the site or using it to grow your reach and brand, tapping the popularity of Facebook is the way to go right now.
1. It’s Apptastic. The only thing more ubiquitous and more buzz-worthy than Facebook is the popularity and ubiquity of smartphone apps. People are using
apps every day, all day long, not only to have some fun and kill some time, but to run their businesses as well. The smart small business will tap
into this trend by both finding and using those apps that make running their business simpler and more profitable, while also offering their own apps that make buying from them faster and easier.