What a difference a year makes!
A year ago, my annual “Top 10 Trends in Small Business” was full of ideas spawned by big changes in technology and the Internet, with things like smart phones and SEO dominating the list.
While the Web and technology certainly make an appearance, it will be no surprise that many of the dominant trends right now relate to the economy.
And, while I will note again that this is not a prediction column, I should report that my #4 trend last year was eerily prophetic: “2008 looks to be a year dominated by the ripple effects of the sub-prime mortgage crisis: A sluggish economy and probably a recession. For the small business, the effects are substantial . . . the overall belt-tightening means doing business all around will be more of a challenge.”
This year, the economic prognostications are even worse, and small business trends generally reflect that. That said, it’s most certainly not all bad news. There is a lot of good going on out there, and plenty of opportunity for those who seek it.
Top 10 Small Business Trends, 2009
10. Money doesn’t grow on sprees: In this era of belt-tightening, reduced budgets, unemployment, and fear, it is easy to see why one of the most obvious trends out there affecting small business is the desire of consumers and customers to save a buck, spend less, and get a bargain.
Even high-end brands are feeling the effect of this trend; the lavish Bellagio Hotel in Las Vegas for instance, a resort that usually commands at least $300 a night, has lately been offering rooms for about half that amount.
Taking advantage: If people are looking for a bargain, give them one. Discount poplar products. Bundle services for less. Negotiate.
9. The O-conomy: The election of Barack Obama signifies many things, but for our purposes here, a main one is that government spending and budgets will be headed in a new direction, and it would behoove the smart entrepreneur to get ready to take advantage of these new priorities.
The stimulus package that Congress will pass in early ’09 will budget plenty of money for all sorts of infrastructure projects – everything from the traditional – roads and bridges – to the new – green businesses and high tech.
Taking advantage: Google ‘bidding on government contracts’ and learn how.
Government largesse – it’s not just for Halliburton anymore.
8. Green goes mainstream: Last year, coming in at #3, was “Green is the new black” – being green was trendy. In 2009, it is expected. Yes, people are looking for a bargain, but an increasing number also want their product and service providers to be environmentally conscious. And green consumers in particular will almost always be willing to pay a premium for organic, sustainable, green products.
Taking advantage: At a minimum, make sure your website indicates your green commitment.
7. The solo-preneur takes flight: According to the Bureau of Labor Statistics, in November, 2008 “employers took 2,328 mass layoff actions involving a total of 224,079 workers.” In addition, “the unemployment rate rose from 6.5 to 6.7 percent. Job losses were large and widespread across the major industry sectors.”
And the unemployment rate is only going to climb higher, and higher.
According to Thomas Frey, the Senior Futurist at the DaVinci Institute, “As a general rule, 7 percent of the recently jobless will attempt to start their own businesses.” Frey says that “the most popular form of startup will the Empire of One, one-person businesses . . . .”
“Look for rapid growth of support structures, management systems, and outsourcing options.”
6. Opportunity abounds! As Warren Buffet says, “You should get greedy when others are fearful and fearful when others are greedy.” Many things are on sale right now, especially stocks and real estate.
5. Web 2.0 tips: Web 2.0 has reached the Tipping Point. Web 2.0 is shorthand for this era of interactive Internet where content is often participant created. YouTube is the most obvious example – the audience creates the Internet experience. Flickr, Slideshare, and even the comments section on USATODAY.com articles do much the same thing.
More significantly, this interactivity has spread to mobile computing, and this presents increased opportunity for small business. Notebooks, smart phones, BlackBerrys, GPS devises, netbooks (small notebooks for mobile Internet), etc. enable you to reach customers as never before. Experts say that the biggest opportunities lie with restaurants, financial and news services, and retail.
Taking advantage: Create a viral video. Create a web app, or a mobile web app. Solve a problem.
4. Shoestring marketing makes a comeback: In this time of tight budgets, where both entrepreneurs and their customers are increasingly reluctant to part with a penny, it is actually more important than ever that the small businessperson step up their marketing. As Richard Branson advises, recessions are time to expand, not contract.
Most entrepreneurs instinctively know this and that is why the trend now is towards increased marketing that costs little but delivers big, such as:
- Online video: Tapping into trend # 5, online video is a way to better interact and connect with your customers. Teach them something new about you or your products.
- Blogs: Anecdotal evidence: At a conference I attended earlier this year, fully half of the small businesses surveyed said they are increasing their blogging and as such are successfully using blogs to grow their business. Blogs make you more accessible. Blogs increase your SEO. Blogs can build your business. Even if you only get, say, 50 people consistently reading your blog, that’s 50 more potential customers than before.
- Old school: Coupons, word of mouth, direct mail, customer service.
Taking advantage: Get crackin’, amigo!
3. Social networking works. Last year’s No. 1 entry on this list comes in this year at No. 3, but not for lack of effort. Maybe it is just me, but doesn’t it seem like people have just become obsessed with Facebook? And it is not just Facebook. It’s Twitter, and LinkedIn, and MySpace, and Digg, StumbleUpon, Del.icio.us, Technocrati, and something like, oh, a zillion more.
Taking advantage: Join some of these sites, or, if you are already on a few, put some time and effort into them. It does pay off. Just last week a friend of mine was looking to do a deal with a major U.S. newspaper. Two people away via LinkedIn and he met the exact person who helped him put a deal together in a week.
2. Innovation rears its head: It is historically true that business innovation expands as the economy contracts. There are many reasons for this. Necessity being the mother of invention is the main one; that is, with fewer customers and a need to keep the business alive, hearty entrepreneurs often get creative as a way to lure people in.
The Xerox machine was first conceived of, and then worked on, during the Great Depression. Ditto Tupperware.
This will be even truer in 2009, for a variety of reasons: The need and push for clean energy, a massive government spending program at home and abroad, technology moving at the speed of light, scared customers, and an era of new visions and possibilities, to name a few.
Taking advantage: Try doing something new. Labor can be cheap right now, and so too can be materials.
And the No. 1 trend for 2009 is, not surprisingly,
1. Economic tumult: Says Business Week, “Expect more budget cuts, layoffs, shutdowns, bankruptcies, and mergers.” Says the National Federation of Independent Business: “Small business owners broadly and sharply [will] feel the impact of the recession. The National Federation of Independent Business Index of Small Business Optimism . . . was the fourth lowest reading in the 35-year history of the survey.”
Says Strauss: At least for the first half of the year, companies will be downsizing, tightening budgets even more, and looking to do more with less. That trend will trump all others.
The good news is that we have probably seen the worst of things and as the year progresses, money and ideas will begin to flow again. Deals may even get made!
Can you take advantage of this moment? Of course, any good entrepreneur would. Give people what they want, namely, the chance to save some money, and the ability to still move forward.
Do that, and the trend winds will be at your back. Here is to a healthy, prosperous 2009.
For more info on how these trends may affect your business, check out these two resources:
- The Business Trends Blog is a great resource of the Small Business and Entrepreneurship Council. It is easy to read, full of great information, and on the money.
- The second edition of my best-selling book The Small Business Bible has an entirely new section on trends in the 21st Century, covering things like the new consumer, e-marketing made e-asy, mobility, succeeding in a flat world, and much more.