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Small Business and Startups: The Trends for 2014

Posted on 10/30/2013 by EDTP Coordinator in Small Business Planning

These trends for 2014 may inform how you approach your small business or startup over the next 12 months. Enjoy!!

Small Business and Startups: The Trends for 2014 (Pt I)

This morning I was awakened by a dream with a soundtrack of Christmas Carols running through my subconscious. As i pulled myself out of a sleepy torpor, I realized that the songs weren’t in my dream, but were actually playing on the bedside radio. Why? Because apparently Christmas advertising has begun! Yes, it is that special time that comes earlier and earlier with each passing year. Used to be it started around Thanksgiving, then somehow it slipped unnoticed to Halloween and now it continues it inexorable march towards Labor Day. I suspect that by the time my grandchildren are grown, they will be going to the mall to view the decorations sometime around the 5th of July. So, along with the holiday cheer and the ceaseless adverts accompanying it, it is also time for the raft of end-of-year-wrap-ups and New Year prognostication. So I thought to myself, “Self, it’s time to write that next-year-trends blog post again.” Perhaps a little earlier this year, but hey, why not get on board with the spirit of the season? The problem is there are so many trends to list that it is too much for one post. Therefore, I propose to split it in two. Yes, I have whittled it down to 10 trends worth writing about, but my attention span is short on most Sundays, so I figured I would write about 5 this week and 5 more in the next post. Here ya go:

1. Back to basics. In 2104 companies will start to place less emphasis on social media and online marketing. A few months back, Ross asked in this blog  whether small business should simply give up on social media marketing and outlined several trends that would support the decision to do so. Posts like these beg the simple question:  do many of the newest marketing tactics actually work? Many businesses are answering that question in the negative and are focusing their efforts on the old and true methodologies and turning back to their father’s way of doing business: watching competitors and competing industries to learn what works for others; listening more closely to customers via simple surveys and high quality customer service; looking internally for great ideas and new strategies by listening to the team; reading books and attending conferences to better understand  the business environment; and, finally, turning to personal networks for advice and insight from trusted sources.

2. Health care and employees. I (along with around 3,672,435 other bloggers) have written a great deal about the impact of the Affordable Care Act on small businesses and startups. Well the time has come, the rubber has met the road, the online health insurance exchanges are open, and… it’s a disaster. But it is a qualified disaster and one that will be repaired and improved upon over the next few months. The problem is not the law itself, nor the underlying assumptions abut how it will make quality healthcare available to millions more people, reduce health care costs, improve economic growth, and lower our national debt. Rather the problem is technical. Poorly executed web sites with bad UI, broken and inadequate databases, slow servers, and massive traffic combined to bring the process to a frustrating crawl the minute the exchanges opened for business. But as most internet-based business managers know, these problems are fixable and with a little more time, an infusion of hard work, and some creative problem-solving there is no reason to think this Obamacare thing will finally get up to speed. For small businesses in particular this is great news. Meaningful choice in health insurance products will become readily available, not just for consumers and the self-insured, but for businesses that provide coverage to employees. This means that costs will drop, options available for coverage will improve, and businesses will be more able to deliver on the promise to their workers that they will be taken care of.

3. New payment methods. They’re here: electronic wallets, mobile credit card payments, smartphone powered gift cards, combination transit/debit cards are available today and they will grow in importance and ubiquity in 2014. It starts at the street level: walk into a Starbucks today and, of course, you can pay with that crumpled up $10 bill in your wallet, or you can have them swipe your credit card, but you can also pay with your smartphone, using  Starbuck’s own app or with Square Wallet a third-party  payment system. Google Wallet is available as a payment in thousands of retail stores as is PayPal. These innovative approaches will make cash transactions increasingly rare in the next few years, while increasing our dependence on the Internet backbone for our transactions. Hmmmm. Makes me think about stashing some gold coins for when the whole thing crashes…

4. BYOD and self-service. More and more and more, businesses large and small are revamping how they approach IT and their employee’s computers and mobile devices. The cloud has changed everything in how business is conducted, hot software is distributed, and how workers access data, improve productivity, and interact with technology. Security is critical for companies making the switch to a “bring-your-own-device” policy and several companies are offering apps and suites of programs to provide accessibility via worker’s own devices while maintaining a secure environment for the enterprise.

5. Offering suite solutions. Office space gets more expensive and leases get more onerous, while remote work becomes more common, tools for distance collaboration get more sophisticated, and people get used to approaching work more flexibly. The combination is bad news for landlords and great news for co-working facilities and companies like Regus that offer shared office solutions and short-term facility rentals. In spite of Yahoo’s much-noticed change in policy this year, more and more companies will be reducing their office footprints as their workers choose to work from home, work from Starbucks, or work from their car while on the way to someplace even cooler.

Small Business and Startups: The Trends for 2014 (Pt II)

I started a couple of weeks ago with the first part of a post on small business trends for 2014; today I have 5 more trends that I’d like to share. Two things to note: first, crystal balls like this one populate the Internet and mine is no better or worse than the many others out there. Secondly, trends are trends and nothing more. Some of them have legs and will be with us for a long time, others are like vapor – these may be in vogue at this moment in time, but a trend today is a mere memory to business owners a year from now. Having said that, these may inform how you approach your business in the next 12 months; here ya go:

1. Outsourcing social media. Many small business owners are devoting a significant chunk of their capacity to social media marketing, albeit sometimes with limited results. Studies have shown over 60% of small business marketers devote as much as 10 hours per week to SM campaigns and tactics. 25% of a marketer’s capacity is a huge investment by any measure and outsourcing the effort starts to look attractive to many managers and many have hired outside consultants to help. In fact, 15% of them are outsourcing design and development of their SM campaigns, 11% using outside capacity to create content and 10% are outsourcing their social media analytics. By outsourcing managers can free up their time, leverage expert help, and create brand value. Beware, however, a loss of control over messaging, increased costs, and poor integration with your other marketing efforts.

2. Crowdfunding for startup companies Great news, everyone! Recently the Securities and Exchange Commission proposed new rules to govern the upcoming changes in equity crowdfunding for startups and small businesses. The new rulers would permit startups to raise as much as $1 million from don rows online. It’s about time! In the several years since the launch of sites like Kickstarter and Indiegogo, filmmakers, artists and charities have used the Internet to gather support for their undertakings with huge success. But small businesses have been unable to take advantage of this innovative approach. The proposed rules are quite similar to those originally approved in the JOBS Act legislation passed last year:

  • Startups cannot raise more than $1 million in any 12-month period.
  • Investors with annual incomes or a net worth below $100,000 can only invest $2,000 or 5% of their annual income or net worth, whichever is higher
  • Investors with annual incomes or a net worth above $100,000 can only invest up to 10% of that annual income or net worth.
  • Transactions must be conducted through an intermediary. Intermediaries include registered brokers, or as a new type of entity called a “funding portal.”

For small investors the payoff could be huge (imagine investing a modest amount for a piece of a company that could go on to become the next Facebook or Twitter), but the risks are even greater. Studies have shown that startups fail at a rate between 75% and 90%, so the risk to this new breed of small-time equity investors is real and it is critical that they be well-informed. The proposed rules seek to mitigate that risk through the income and overall investment limitations.

3. Consumerization of products. Remember kozmo.com? Kozmo was the late 90’s startup that began life as a video rental/delivery service and rapidly grew it’s ambitions to include delivery to your door of everything from books to razor blades within an hour! Well as cool as it was, Kozmo was about 15 years ahead of it’s time and was doomed to be a very well-funded failure. Today we are seeing the beginnings of a fiercely competitive effort to resurrect the idea of same day delivery of consumer products: Amazon, Netflix, Zappos, Staples, Ebay, and even Walmart are getting in the game to get you your groceries, shoes, office supplies, electronics, toys, and makeup on the same day that you place your online order! For instance, Amazon has switched its strategy from their efforts of the last decade to avoid state sales taxes on purchases, to one of building regional, urban warehouses and distribution centers with the goal of getting consumers their stuff within hours of an order being placed. The calculation is that many consumers would happily pay the tax in exchange for the convenience. And Ebay is building a network of couriers who, for a fee as little as $5, will acquire merchandise locally and deliver it directly to user’s doors, often within the hour. Sensing the threat, and not to be outdone, Wal-Mart has been testing a same-day service in several cities, delivering merchandise directly from its local stores.

4. Image based content. Historically, searches for online images have been accomplished by searching for the meta-data associated with the image – the tags and words used to describe the picture. New technology is allowing for computer vision techniques to the image retrieval problem, that is, the problem of searching for digital images in large databases. Not surprisingly, Google Images is the largest of these systems, allowing users to either type in a term or expression or to upload an image and let the network search for a visual match. But Google is not the only one making use of the technology; for instance you can download an app today that allows you to snap a picture of your prescription drug and ID My Pill the app will search for the visual match and identify it immediately. Like.com, a image-based matching system for fashion, was acquired by Google in 2010 looks for visual matches based on user’s choices or from images they upload, and uses a unique algorithm to make suggestions on other clothing and jewelry the user might like. Other companies are moving in this direction, and recommendation engines are becoming more and more common.

5. Search is personalized. Personalized search is one that is customized based on a user’s own web history, physical location, and personal profile. Today, when you perform a search on Google, the results you see are based on what sites you have visited, what products you have purchased, what IP address you are browsing from, and what your social network looks like. In fact, as I write this post using Wordpersss, I am seeing ads for vacuum cleaners when I search. Why? Because it happens that I was searching online for a new one the other day and Google is well aware of that fact. The vacuum retailers have simply recognized that I am a hot lead, and worth the money they are paying to get those ads in front of me! For small businesses, this illustrates a great opportunity to tailor their SEO/SEM strategy to the folks who are most likely to be their customers, whether because they are already searching for or buying similar products, or because they are located just down the street. What this means for search marketing is that your company or product might not appear on page 1 of Google’s results on every single search, but rather only on the searches that really matter. In other words, why pay for premium placement of your ads if the user who is viewing them is less likely to buy your service or product?