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.
Here are Nos. 10 through 6:
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 that is all around. On the small-business front, one reason things will continue to improve is the small-business bill that became law earlier in the year. One benefit of that 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 SBA-backed loans. 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 such as friends & family, angel investors and partners, one new trend is the advent of online portals that foster group lending.
Peer-to-peer lending, as its name suggests, 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.
Another option, called crowd funding, occurs when you go to a crowd-funding 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 postcards 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.
The most recent survey I saw on this, and I have seen several, indicates that in 2011, 17% of the small-business respondents said they were going to increase their website marketing. Another 15% indicated they would spend more on e-mail marketing this upcoming year, and 13% were going to boost their 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: the growth of “buy local” campaigns and the surge in local farmers’ markets.
6. E-boom. What if I were to tell you that there was one sector of the economy that grew at an 11% clip this year, and that was on top of 11% 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, my friends. Oh, I know, e-commerce is so 2002 … except when it isn’t. There simply are few other places where the economy has an above 10% 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. Like yours, right?
Next week: the top five.