10 Small Business Trends
Overall, a small business can usually react to market conditions more quickly than a big one. It also can be more flexible in changing marketing direction than the big business world. Smaller businesses don’t have the same burdens as corporate giants. Big business must worry about altering signage, products, marketing, and business processes across hundreds (or thousands) of locations.
This is one reason why small businesses have a competitive edge over large businesses when it comes to trend adaption. Plus, small businesses can even create trends — while large corporations sometimes can struggle to stay current. Here's a list of some of the latest trends affecting small businesses:
Impact of rising interest rates
In September 2018, the Federal Funds Rate was 2% to 2.25%. Flash forward to September 2023, and the rate has climbed to 5.25% to 5.5%. This trend of higher interest rates can mean increased borrowing costs for small businesses. Plus, it can also reduce the ease of credit access for growth initiatives and day-to-day operations. The dangers may be less business investments, limited expansion, and higher debt costs.
Managing the impact of rising interest rates is crucial for small businesses. Trending solutions can include alternative financing options such as grants, venture capital, peer-to-peer lending, crowdfunding, and other private funding sources. Other solutions can involve renegotiating existing loan terms and focusing on improving cash flow to help mitigate long-term debt effects.
Strategies to consider for cash flow and to help save money
Cash flow strategies can involve strict budgeting, negotiating with suppliers for best terms, and detailed monitoring of money flows. Another often overlooked strategy is to consolidate software use by purchasing multipurpose software to help perform multiple functions.
Along those lines, a business may also reduce costs by outsourcing HR tasks to an HR provider with technology platform. The National Association of Professional Employer Organizations (NAPEO) reports that using a PEO provides a cost savings ROI of 27.3%.* That works out to be about an average yearly savings of $1,775 per employee.* The same report found that businesses in PEO arrangements grow 7-9% faster and are 50% less likely to fail.* A PEO like TriNet, for instance, offers a technology platform to help streamline business functions, be cost effective, and increase HR effectiveness.
Adapting to hybrid workplaces
The combination of in-office and remote work has rocketed over the last few years. One study discussed at a recent remote work conference found job postings offering remote work options increasing by three-fold. It allows flexibility, accommodates employee preferences, and fosters employee mental health — all while maintaining productivity and collaboration. By using time and attendance tools and training and development products like what TriNet offers, businesses can cost-effectively streamline its operations with remote workers.
Challenges of transitioning to remote work
The trend of in-office to remote work has brought numerous challenges to many businesses. Employers may need to adopt new communication channels and provide employees with the necessary applications and technology to work remotely. Cybersecurity safeguards and security education should be considered to help protect company, employee, and customer privacy and sensitive data.
And while remote work is growing, there are other underlying complications. Taxes may be based on where the workers live and or work, not where business headquarters are located. Unemployment insurance and workers' compensation coverage varies across state lines and rules and requirements and can be even more complex internationally. New company policies and practices may be needed to comply with tax compliance.
Rising demand for digital marketing
With the continuous growth of online platforms and rapidly changing consumer behaviors, businesses are investing in new methods and technologies to establish effective online presences. Email marketing continues to be one of the essential and cost-effective way to reach target audiences. Another newer approach is the growing use of short videos for marketing and engagement. Chatbot implementation, based on artificial intelligence (AI) technology, also continues to trend, with the technology providing solutions or specific instructions to customers — without tying up other company resources.
A more recent trend is the promotion of user-generated content (UGC) through photos, reviews, comments, and videos. A recent report noted 79% of people say their purchases are highly impacted by UGC, up from 60% in 2017. And consumers find UGC has almost ten times the impact of influencer content, increasing UGC's effect even more.
Importance of SEO and voice search
Globally, there’s an increasing demand from consumers for voice assistants like Siri, Alexa, and Google Assistant, and product usage is likely to increase from 36.6% in 2022 to 46.9% by 2025. By using voice search optimization methods, small businesses can be noticed more in voice search results. Seach engine optimization (SEO) involves making website content improvements to help increase visibility and rankings through search engines, both by text and voice. Optimizing content with SEO techniques also helps to enhance visibility and attract relevant customer traffic.
Attracting new employees in a competitive market
Over the past few years, it’s become more and more difficult to find workers. About 43% of small business owners report having job positions they can't fill. Small businesses need to stand out to attract top talent. Some methods are offering competitive salaries and benefits, nurturing a positive company culture, allowing flexible work arrangements, and promoting professional growth and development. But in many cases, small businesses don’t have the resources to offer some of these attractors. That’s why small businesses take advantage of providers like TriNet for recruiting tools, professional development programs offerings, and premium level benefit options.
Innovative approaches to employee engagement
With “quiet quitting” and the Great Resignation affecting many businesses, keeping employees motivated is increasingly important. Latest trends to improve engagement include:
- Offering childcare benefits or offering on-site childcare facilities.
- Making sick leave more flexible by including mental health considerations to prevent burnout.
- Increasing compensation to retain talent, and to increase interest in job postings.
Using technology platforms, such as those that TriNet offers, also helps small businesses engage and motivate employees. TriNet’s user-friendly mobile app provide employees with easy access to stay connected and to access benefits or payroll information anytime anywhere.
Increasing use of mobile devices in business
Mobile devices bring convenience, flexibility, and accessibility to many business processes. Recently, Aberdeen Strategy & Research reported several important trends. Overall, 30% of employees now have smartphones exclusively used for business purposes. This means employees are no longer tied to their desks to stay current with tasks. Business communication is also improved, as well as collaboration among workers.
Additionally, it's forecasted that in 2023, mobile commerce will garner a 43.4% share of eCommerce sales. That's up from 41.8% in 2022. Embracing mobile devices in business processes may enhance productivity, improve customer interaction, streamline operations, and improve sales in small businesses.
Adopting new tech to help gain competitive edge
Small businesses constantly seek innovative tools and solutions to help optimize operations and set themselves above competitors. The number of businesses implementing AI has grown. Forbes reported that over half of business owners are employing AI for fraud management and cybersecurity. And 64% believe that AI will improve customer relationships, while 56% are already using AI for customer service. Businesses are adopting advanced technologies such as machine learning (ML) to help predict future trends, forecast demand, and anticipate customer needs. Other AI/ML benefits are process automation, logistics optimization, and faster product development.
Staying on Top of the Trends
By staying on top of industry trends, small businesses can anticipate market shifts, identify emerging customer needs, and adjust strategies. They can do this by using market research, monitoring competitors, attending industry conferences, and leveraging industry publications, blogs, and social media for insights. By staying ahead of trends, small businesses remain relevant, meet customer preferences, and seize new opportunities for growth and success.
Outsourcing HR functions are another popular trend offering significant benefits to small businesses. Small businesses can rely on external, experienced industry-specialized HR professionals to provide support on employment-related rules and regulations. These experts provide guidance and best practices and help with HR functions. Also, TriNet helps small businesses access premium level benefits to compete for top talent. TriNet full service HR solutions means that business owners can get time back to focus on its core business activities.
*Individual business results may vary.
This communication is for informational purposes only, is not legal, tax or accounting advice, and is not an offer to sell, buy or procure insurance.
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