By Rieva Lesonsky
Let us know what you think by tweeting me @Rieva or @BizTrendCast.
Outlook for the Business-for-Sale MarketFrom BizBuySell
looking ahead, 2017 is poised to be another promising year. According to BizBuySell’s December nationwide survey of business brokers, 79% expect the number of business-for-sale transactions to improve in the new year. Brokers believe the following factors will have the greatest positive impact on the 2017 small business environment: President-elect Donald Trump’s policy changes (31%), an increasing number of owners looking to sell (22%) and improving small business financials (13.82%). In addition, half of the responding business brokers expect sale prices in 2017 to remain consistent with 2016, while another 45% expect prices to increase.
While the post-recession market leaned in favor of buyers thanks to reduced confidence and tighter access to capital, today’s environment is much more balanced. A good indicator of this is the fact that sellers received a final sale price much closer to their original asking price than in previous years, a trend we expect to continue in 2017.
Roughly 5% of today’s small business market buyers are Millennials. As more Baby Boomers sell their businesses, the number of Millennial buyers is sure to rise, however most buyers in 2017 are still expected to be college-educated, middle-aged men according to the BizBuySell 2016 Demographic Study.
Planning for SuccessFrom Josh McCarter, CEO, Booker
- Review Your Results from 2016 and Build a Plan for 2017. What worked, what didn’t work? Did you achieve your desired revenues, growth rates, or targeted expenses? If so, what enabled you to do meet your goals? You should double down on those efforts in 2017. If not, what do you need to do differently to achieve those desired outcomes? Set specific goals, and create a plan to achieve these goals. Using the SMART Goalsframework can be helpful if you haven’t done this before. Fail to plan = Plan to fail.
- Get More Out of Your Existing Customers. Focusing on serving your existing customers can help you grow your revenues faster and more efficiently than spending on new customer acquisition. Why? Because happy existing customers are your best and least expensive marketing channel. They will return and buy more from you, tell their friends to buy from you, and write positive reviews that new customers will read before deciding to buy from you. Consider investing in marketing tools and systems that will help you offer targeted promotions to your best customers or incentivize them to provide feedback, refer friends, and/or write reviews.
- Review your systems and service providers.Do you know how much you are spending each month on marketing? Do you know what results your marketing channels are driving? Do you know how much you are paying for the various software, telecom, and other systems you run your business on? Are there new tools available that consolidate these services into one system that is available [for less money than] the price you pay for all the individual solutions? Every year new advancements are made in marketing, software, technology, etc., and it’s important to be sure you’re spending money efficiently on products/services that help you drive results and free up your time so you can do what you love—serve your customers!
The Growth of SaaSFrom Adrian Phillips, senior manager, Product Marketing, Citrix
Unless you are in the IT service provider business, the reasons for owning and managing your own IT infrastructure and perpetual software licenses are diminishing. As old servers reach their end of life and no longer perform the way they used to, and as costly and disruptive software upgrades are needed, more and more businesses are looking outward for help. Business owners and technical decision makers have a choice that often comes down to two things: total cost of ownership, and core competency. The familiar option is to continue making the expensive upfront purchases to own the hardware and software your business has been using, which also requires ongoing maintenance and support.
In 2017, however, more business decision makers are going to shift to the new paradigm, and will choose a monthly or annual subscription from a software-as-a-service (SaaS) or cloud-based hosted IT provider. Their reasons for choosing the subscription model will include always having access to the latest software and the fastest compute resources, as well as secure and redundant data storage. Choosing this option frees up everyone on the team to focus on what’s most important in the business—and not the IT. The renewed focus and improved efficiency this provides is truly transformative and will position the modern business for growth in the years to come.
Tech & RetailFrom Smadar Landau, CEO, Feelter
Digital trust. We don’t trust strangers in real life. We won’t get into their cars or hang out with them, but we’re perfectly fine ordering an Uber. Why? Review systems. Small businesses lag behind larger entities because they lack an online presence. Cleaning services, for instance, can only gain traction through word-of-mouth, but they’ll continue to lag behind apps like Handy and TaskRabbit without a website or social page. In 2017, small businesses can boost their bottom lines by encouraging referrals through social media and web page traffic. “Instagram a photo of your new [coat], and we’ll reduce the price of your next purchase.”
Crowdsourcing is huge for retail, and boutiques can do it too! Get feedback from your customers, asking which products, fashions, and colors they prefer for Spring 2017! If you’re crafting your own products, hold a competition to design some element, whether it’s the color or packaging, involvement is key.
Remote WorkFrom Chris Byers, CEO, Formstack
People are moving from one job to the next more frequently than before. Turnover is costly to employers, so what are some actions businesses can take to improve employee retention rates?
In 2017, businesses will continue to focus on employee retention as a key HR challenge. Some of the newer solutions they will consider to improve employee retention rates include:
- Allowing employees to work remotely or set more flexible schedules
- Creating more engaging onboarding and training programs through innovative technologies like virtual reality
- Working with marketers to create more of a company brand for improved recruiting
- Setting up employee referral systems that include monetary bonuses for those who refer a successful hire
In the coming years, human resources teams will adopt an increased focus on data, which will impact recruiting processes and the development of company culture. Using data to discover which recruiting tactics result in the most successful candidates and employees will help recruiters tailor their methods and produce more positive results. Additionally, analyzing personality traits, work styles, and more will give recruiters better insight regarding culture fit, which will lead to better hires and less turnover.
Using data from employee satisfaction and/or engagement surveys to measure employee happiness and engagement will help HR leaders create a more engaging and vibrant company culture for employees. It will give the HR department true and relevant information that can be used to create employee programs, benefits, and activities that increase employee happiness and retention and aid in company success.
How can data management help an HR department?
In 2017, employee development and engagement will become key focus areas for the HR department. But to make time for these endeavors, HR professionals will need to have streamlined data management processes in place. HR teams are tasked with collecting and managing large amounts of employee data. Adopting a secure, easy-to-use, digital data management platform can help automate the collection and storage of important employee information, which frees up time for HR professionals to focus on the things that will keep employees around—such as professional development opportunities and engaging workplace activities.
What tools should HR departments invest in to make the most out of the data and information they collect from employees?
As HR departments become more data-focused, some HR leaders will consider adding a data analyst role to the team. Technology experts like analysts are typically found in the marketing or product departments, but they are increasingly needed in the human resources world as more companies adopt a people analytics approach to recruiting, hiring, and employee engagement.
Small Business LendingFrom Jared Hecht, CEO, Fundera
As we’re not quite sure what Trump will prioritize when he steps into office, predicting what the state of small business lending will be in 2017 is tough. However, if Trump does end up deregulating banks (which could take years to implement), it might mean small business owners would have easier access to financing from their banks. If banks up their lending to small businesses, we also might see more banks partner with online brokers or lenders, as they will want to acquire more small business customers. But again it is important to emphasize there is still a lot of uncertainty as to what will happen, and even if deregulation occurs, it could take years for us to feel the effects.
Is Doing Good Good for Business?From JJ Ramberg, host, MSNBC’s Your Business & cofounder, Goodshop
I am seeing an increase in the number of funds which are taking a systemic approach to addressing important societal issues though their investments. For example, Encourage Capital makes commercial investments into solutions to social and environmental problems. The recently launched Brava Investments looks to address women’s inequality throughout the world. Both these companies, and others like them, seek compelling returns based on a double bottom line. This indicates a trend of more investors looking into the social impact of the companies in which they put capital.
7 Ways to Fuel GrowthFrom Jim Squires, Director of Market Operations, Instagram
This year saw the rise of the mobile-first business owners who felt more at ease running their businesses from a mobile device than from a desktop computer. Here are seven ways to fuel SMB growth in 2017.
- The Shift to Mobile Will Continue. It’s no secret that people love their mobile devices, with American consumers now spending three hours a day on their mobile device (eMarketer). In fact, shopping on mobile reached record highs this holiday season, with Black Friday becoming the first day in retail history to drive more than $1 billion in mobile revenue at $1.2 billion, up 33% over last year. Customers are increasingly turning to mobile, so small businesses need to as well. The good news is that reaching customers via mobile is becoming simpler than ever. If SMBs have a smartphone and an Instagram business profile, they have all the tools they need.
- Video Will Rule the Day: In the shift to visual communication, video is becoming the medium of choice for marketers—third party research predicts that 75% of all data will be video by 2020. With new features like live video on Instagram Stories, businesses can connect with customers in real time and take viewers behind the scenes of their business. And easy-to-use tools like Hyperlapse and Boomerang allow anyone to create engaging and relevant videos in just minutes.
- SMBs Will Deepen Customer Relationships: Customers crave real-time engagement with brands—as do small businesses with their customers. SMBs will continue to make strides in 2017 to connect directly with their customers, be it through calls, texts, emails, online chats and even tools such as Messenger. On Instagram, SMBs will also continue to take customers behind the scenes to tell the world how the business operates, the team that makes it all happen and the effort it takes to bring the product or service to market. This level of authenticity will help SMBs connect with current customers and attract new ones.
- SMBs Will Reach More Customers Globally: Mobile marketing has opened new doors for small businesses to connect with customers across the world. On Facebook, for instance, more than one billion people are connected to at least one business in a foreign country. With tools to help SMBs connect with new customers in other countries that look like their best ones here, that number will only increase. In 2017, we’ll start to see more domestic businesses become international ones.
- Content Will Be Customized More Effectively: While social metrics such as “likes” and comments are an indicator of marketing success, the real metric that matters is sales. With detailed customer insights available to businesses on Instagram, they can pinpoint actionable information about who their followers are and which posts resonate better than others. As small businesses dive deeper into the behavior and demographics of their audience, they can create more relevant and timely content – which will ultimately help drive sales.
- The Barrier to Entry Will Be Lower…But with that Comes Potential Challenges: The good news for aspiring small business owners: With the proliferation of new, affordable technologies and platforms for starting and running a business, becoming a business owner in 2017 will be cheaper and easier than ever before. Companies like Intuit, Shopify and Square have solved many of the pain points facing small businesses, allowing them to focus on what truly matters most: finding new customers and growing. The bad news? Easier entry will result in a more crowded landscape, with competition increasing across the board. And, with a myriad of solution providers targeting the small business community, navigating the tech landscape will be increasingly difficult. Choosing platforms that help your small business stand out will be essential.
- Creativity Will Be Democratized: It wasn’t long ago that creating a video ad was only available to big brands with hefty budgets. But in today’s mobile economy, small businesses can easily develop creative and effective ads from the palm of their hands. With a mobile phone and a few creative tools and resources that can help them be more agile and capture real-time moments, SMBs can create effective ads in mere minutes with built in distribution to 600 million people across the globe. Expect small businesses to push the limits of creativity in 2017.
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