Whether you’re the kind of person who likes to see the glass as half full or you prefer to see it as half empty, there is no denying that for most American small businesses the new year will bring a mixed bag of opportunity and adversity, hope and anxiety. There are many reasons for the apparent paradox. The up coming year will very much be shaped by the current financial and economic crisis engulfing America and the rest of the world, the beginning of an new Presidential term in the U.S., and the continued evolution and development the Internet, mobile technology, and consumer electronics.
Here is a closer look what small businesses can expect in 2009:
1. The number of small businesses is expected to grow. With the unemployment rate climbing and job security being challenged across the board, many will try their luck with small and personal businesses. A large percentage of this population will consist of Gen Y and Babyboomers.
2. Flexibility and innovation reign supreme. To survive the tough economic conditions, small businesses will need to increase their productivity, efficiency and customer value. This will compel many businesses to be creative in the way they operate and in the products and services they offer.
3. A year of bootstrapping and belt tightening. With consumer confidence at the lowest it has been in years, and many industries effected by sluggish consumer spending, small businesses will need to focus on improving their cash flow, reducing costs, and holding on to their customers.
4. Less legitimate funding for small businesses. 2009 promises to be a hard year for small businesses in need of financing. The banks as well as all sorts of commercial and private lenders are pulling in the reigns when it comes to offering money to entrepreneurs and small companies. Simultaneously, expect an increase in predatory lending schemes and their “barely legal” equivalents, such as payday cash loans.
5. Mobile technology provides necessary tools. Mobile technology will continue to offer small businesses the ability to boost productivity, efficiency, and market outreach in order to maintain a competitive edge and hold on to customers. Expect the continued growth and usage of navigation systems, location-based services, smart phones, netbooks (small notebooks primarily used for Internet access), and a whole slew of mobile applications.
6. Expect cloud computing and SaaS to remain strong. Both cloud computing and Software as a Service (SaaS) offer essential tools that can help a wide variety of small businesses. Cloud computing allows small businesses to remotely manage and store information as well as access customized software or services from virtually any device with Internet access, while SaaS refers specifically to an application that is provided as a service across the Internet. Not only can small businesses access sophisticated and powerful applications that have previously only been available to bigger businesses, but they can reduce their expenditures on software and equipment.
7. Small businesses broaden their use of online marketing tools. Over the past few years, the Internet has opened up a whole new marketing frontier for small businesses. While websites, blogs, emailing, online listings, POI databases, and social networking sites such as Facebook, Twitter, LinkedIn, and MySpace may all sound like “old news,” many small businesses have yet to jump on the bandwagon. But not for long. These online tools will continue to provide small businesses with vital access to current and potential customers and that should win over a lot of “late-comers.”
8. The Government has its eyes on infrastructure. President-elect Barack Obama has pledged to increase federal spending on bridges and roads across America, as well as projects for the development of alternative energy sources, clean technology and education. Several small businesses will benefit directly from the federal spending increase by accepting specialized government contracts, and many other small businesses may benefit indirectly by providing goods and services to large contractors.
9. Consumers turn to bargain hunting. Being extravagant and excessive is loosing its cool. With job security declining, incomes shrinking, and debt running high, consumers are trying to stretch their dollars as far as they will go. Expect this trend to continue in the coming year as the future of the economy still remains uncertain.
10. Still going green. The demand for organic, sustainable, and green products should remain strong in certain sectors. But in addition to caring for the environment, consumers and businesses will be drawn to the “secondary” benefits of cost savings and improved efficiency that many green products have to offer.
11. Old school marketing techniques make comeback. With fewer dollars to spend on marketing, small businesses will turn to the tried and true strategies: building up word of mouth advertising, sending out direct mail and coupons, improving customer service, and offering sample products or free trials.
12. Opportunity knocks. With huge discounts on labor, materials, real estate, and stocks, common business sense dictates that a recession is a good time to expand operations. This idea is supported by the likes of Richard Branson and Warren Buffet (and you can’t really argue with them!). Expect that those who have the means will take advantage of the economic downturn to expand or develop their businesses.
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