Small business is the core of the American economy. Companies with fewer than 500 workers make up more than 99 percent of American businesses. Small businesses face many unique challenges, forcing them to think creatively in order to achieve success. Teresa Wolande, a retired insurance, and international risk management professional examines some of the important trends which affect today’s small business economy.
- Social Responsibility
Companies with established social responsibility initiatives will receive more attention in today’s competitive business environment. Companies which have not dedicated themselves to ethics, responsibility, and environmental friendliness may find that they cannot gain as much market share as other companies which have taken on these principles. Volunteerism, corporate sponsorships, energy efficiency, and strong recycling programs are only a few examples of how companies can enhance their social responsibility. Companies which do not consider the needs of their community and the world, in general, will lose business.
- Subscription Services
Subscription services are continuing to grow by as much as 890% since 2014. This means that there are plenty of opportunities for new subscription companies to make a name for themselves. Apparel, beauty, food, and lifestyle boxes are the most popular, though pet products and books also make a strong showing.
A subscription box has an advantage over a traditional sales website because the company can control costs while selling the product at a fixed price each month. Subscription boxes are fun to receive, and customers are always looking for new ways to treat themselves in this strong economy.
Most customers prefer to buy from companies that take their personal needs into account. Social media, chatbots, and personalized savings are excellent ways to start. By approaching customers on their own turf, companies are able to build a rapport with the public and to show that their business cares about the individual.
Chatbots may seem impersonal at first, but they provide the experience of working with a customer service representative without the added cost. When a question goes beyond what a chatbot can answer, the conversation can be seamlessly transitioned to a human representative.
Personalized savings is another highly useful way to build loyalty. Businesses can collect consumer data through rewards programs and use this as a way to bring customers the discounts they want the most. For example, a grocery rewards system can provide coupons for frequently purchased items. Some grocery rewards systems provide a certain percent back each quarter in return for store brand purchases. These programs help to build a good relationship with the customer and increase the chances that they will return to the store or website.
- Alternative Lending
Non-bank lending has grown a great deal over the past few years. Since more than 80 percent of traditional loan applications by small businesses are rejected, there is a strong market need for alternative lending.
The Small Business Administration provides non-bank lending, and there are many startup businesses offering funding online. Peer-to-peer lending has become popular in the American market, with such sites as StreetShares, Funding Circle, and Lending Club in leading positions.
- Data Privacy and Control
Online businesses need to be especially careful with their customers’ privacy. When collecting information through social media or through marketing initiatives, it is best that the system of storing data is completely transparent. Customers should also have the opportunity to remove all of their information from company databases if desired. Purchasing advertising or marketing list data can be problematic since up to 70 percent of purchased data is inaccurate.
To combat this problem, businesses can join shared marketing services like Valpak, where the company printing and distributing the ads is responsible for maintaining the database. This allows customers to receive advertising that they need based on their local area. Social media ads are another excellent place for small businesses to advertise. With a relatively low entry cost, social media ads can be shareable and can catch the interest of customers at home and around the country.
- Millennials in Business
Young adults in the Millennial generation are beginning to enter the business world in great numbers. Millennial small business owners are likely to be better educated than their peers and will bring a great many skills to the table. They are accustomed to the digital world and they will be able to respond to changing market trends.
The Changing Business World
In order to keep up with the constant flow of information, entrepreneurs need to stay on top of business trends. Teresa Wolande recommends that all small business owners take a close look at their operations and adjust them to today’s market demands. When taking these factors into consideration, businesses can find success in a competitive environment.