Despite what a gloomy picture we all may think 2016 was, 2017 could boost growth and positive changes for small and medium businesses, if they embrace technological growth and diversity in the workforce.
The year 2016 was arguably a tumultuous one for much of the world, with shifts in politics and economics to growth and decline in jobs and business sectors. The World Bank’s Global Economic Prospects reported weak growth across the globe for a rather bleak 2016, lowering previous projections for the year from 2.9 percent to 2.4 percent. The report also uncovered increasing pressure on emerging markets and developing economies that include growth stagnation and lower commodity prices.
A Rosier Outlook
Yet with the doom and gloom of 2016 firmly behind us, many are looking to the fresh year to usher in more positive changes and development of economies. In fact, a recent survey of 400 small and mid-sized business (SMB) owners conducted by The Business Journals, which is a division of the American City Business Journals, found an increased level of confidence in the future success and expansion of their companies. The study, which was conducted the day after the 2016 United States’ Presidential election noted positive outlooks of 82 percent for 2017, the highest registered in more than eight years. Confidence has been rising steadily since 2008 when it took a nose dive in October of that year. The perceived outlook amongst the surveyed group has hovered around its highest rates from 2015 to 2017 projections.
Furthermore, given the latest US Census Bureau data on Metropolitan Statistical Areas (MSAs), the top 50 are bases for two-thirds of all businesses throughout the country. Seventy-four percent of those top 50 areas encountered business growth in the five year period from 2009 to 2014, while smaller MSAs experienced less growth. Austin, Miami, Houston, Dallas/Ft. Worth, Orlando and San Antonio enjoyed some of the highest positive percentage changes in the number of businesses in their cities over the last half a decade. In contrast, Cleveland, Norfolk/Virginia Beach, Cincinnati, Milwaukee and Memphis battled through some negative percentage changes in the number of companies in their markets.
A Growing Responsibility
The positive growth in many American areas has also ushered in a new era of corporate responsibility with most of the top 100 American companies possessing Corporate Social Responsibility (CSR) programs. The SMB segment, which has previously been slow to adopt more socially responsible and sustainable activities like their large corporate counterparts, is having to change their approach to addressing a growing global concern. A 51 percent majority of SMBs polled for 2017 agree that current companies, large or small, have a greater expectation to address critical environmental and social issues. While a steady increase over the past six years has them agreeing with an effort to make sustainability a more integral part of their services or products. This should usher in the adoption of increasingly technological and digital improvements to corporate operations that make both working and societal arenas happier and more productive.
A Diverse Leadership
The number of Latino-owned and operated businesses is also projected to rise in 2017. In fact, Hispanic-run businesses represent some of the highest growth rates in America, at 40 percent it is three times the national average and is expected to reach $640 million in 2017. They lead industries in administrative support, construction, transportation and warehousing and health care and social assistance. This means that Latinos are a substantive key to economic growth and job generation in local communities in the new year.
A Technological Shift
Regarding marketing strategies and vehicles for large companies, mobile will continue to eclipse previous numbers. The Business Journals predicts that mobile advertising will hit $53 billion, almost doubling 2015 figures of $31 billion. This survey also reinforces the changing role of small to medium business owners as consumers themselves, with an expanded role as end users of the digital information exchange as more than 80 percent utilize smartphones or tablets to read business news and intelligence. Yet many SMB owners are still reporting allegiance to the traditional more static forms of advertising, preferring print advertising or trade shows and events in comparison to more digital activities. What this may highlight is a need for SMBs to differentiate into the technological sphere in the very near future to enjoy the more global and instantaneous efforts of the digital market.
Though hand in hand with digital proliferation comes concerns over cyber security breaches and how this can derail a fledgling business. It’s no longer multinational conglomerates that are under threat by digital data breaches. The Symantec Internet Security Threat Report for 2016 found that 43 percent of cyber attacks prey on SMBs. While SMB owners are increasingly reporting their concerns about the security of their company files and software. Because of the size of their businesses many SMBs don’t have full in-house IT security specialists to combat any problems, but they are crippled when a problem does arrive in paying recovery and lost business costs. At their worst, cyber-security breaches result in 60 percent of SMBs that experience them in having to shutter their businesses within six months of a violation. This has a potential to translate into the loss of 550,000 businesses in 2017. Thus employing the use of a managed IT service provider on contract with an SMB is a much more economically friendly and technologically safe approach. Utilizing the third party services of a digital and technology specialist is a proactive step that can safeguard an SMB in the long run.
A Fresh Perspective
In addition to more savvy uses of technology, the potential for growth and the future success of SMBs lies in the ability to engage a growing millennial workforce. By the end of the next four years, millennials will make up half of the entire labor force. They will add powerful and diverse voices to the business environment, yet come with the expectation for more social and technologically advanced work environments. Many millennials now cite their desire for purpose and meaningful work as greater motivators that salary and compensation in jobs and chosen careers.
To ride the upward trajectory of these positive projections for 2017, SMBs would be well served in the adoption of smart digital and IT strategy in both marketing and business operations and the enfranchisement of an increasingly millennial workforce.
“[What we like most about working with Cohn Consulting is the] quality of service and being treated like an important customer, even though we are a small business.”