2009 Top 10 Small Business Trends

***Update: Our 2012 Top 10 Small Business Trends List is now available***

It's prediction season and we've prepared our annual top 10 small business trends list.  The economy is obviously the key issue facing small business in 2009.  With the global recession and economic turmoil as our back drop, here is our list: 

Economic Trends 

1.  The Recession Drives Small Business Innovation:  With the economy mired in a deep recession, small businesses will focus on cash flow, cost containment, customer retention and survival.  But economic stress will also lead to a wave of small business innovation.  Driven by the need to improve productivity and increase customer value, small businesses will re-evaluate, re-design and refine their products, processes and business models.  Despite the adverse economic climate, innovation will create new opportunities for many small businesses.

  

2.  Government Plays an Increasing Role in the Economy:   Economic turmoil, corporate malfeasance and regulatory failure are leading to much greater government intervention in the economy.  While we believe that the long term, global trend towards market capitalism continues to be strong, governments around the world will take a more active role in managing and regulating their economies.  Small businesses will need to be aware of federal, state and local government policy and program changes and their impacts. 

  

3.  Global Infrastructure Spend:  President-elect Obama and his transition team are preparing a massive, $850 billion economic recovery package.  China, Japan, the EU and other countries are also developing large infrastructure spending programs.  In the US bridges and roads, alternative energy, transportation, clean tech and education will likely see substantial federal spending increases with the impacts likely being felt in the second half of 2009.  Small businesses will benefit directly through government contracting programs targeted at them and indirectly through providing goods and services to larger firms.

  

4.  The Number of Small Businesses Will Increase in 2009:  With job losses high and traditional employment options limited, many will turn to self-employment and small business in 2009.  The prior three recessions have seen small business formation rates increase.  And with it easier and cheaper than ever to start small or personal businesses, we expect a strong year for small business formation – especially personal businesses.  Failure rates will also increase, but not enough to offset the number of new small and personal businesses. 

  

5.  Small Business Globalization Will Temporarily Slow:  While we believe the long- term trend towards small business globalization is still strong, we expect small business globalization to slow in 2009.  The primary reasons are the global economic slump, turmoil in currency markets and small businesses focusing on local markets.  We expect small business exports to pick up in late 2009 as the global economy starts to recover. 

  

Demographic Trends

 

 6.  Baby Boomer Retirement Problems Will Lead to Increased Interest in Small Business:  We’ve long forecasted that baby boomers will stay in the workforce past the traditional retirement age.  Current economic turmoil makes this trend even stronger.  Baby boomer retirement has taken a series of major blows.  The value of their homes, retirement savings and inheritances has all declined substantially.   Many have lost or will lose their jobs.  Boomers will have to extend their working years and small and personal businesses will be their best, and in many cases, only option.

  

 7.  Generation Y Will Turn to Small Business:  Gen Y will continue to be be more entrepreneurial than youth in recent generations.  The economic slump will make this trend stronger as many Gen Yers face limited traditional employment opportunities.  With their risks and opportunity costs relatively low, many Gen Yers will choose to start or work for small or personal businesses.

  

Technology Trends

  

8.  Mobile Computing Continues Strong Growth:  On our list last year, mobile computing is entering the US mainstream.  Notebooks outsold desktop PC’s in the second half of 2008, smart phones sales continued their rapid growth and millions of netbooks (very small personal computers designed primary for mobile internet access) were sold.   Adding the continued rapid growth of navigation systems, location-based services and mobile search results in mobile computing having a major impact on small businesses in 2009.

9.  Cloud Computing Continues Strong Growth:  Another trend that was on our 2008 key technology trends list.  Cloud computing offers too many small business benefits not to continue its strong growth in 2009.  In particular cloud computing lowers capital costs and turns fixed costs into variable costs – two powerful attributes that are very attractive in a down economy. 

10.  Small Businesses Will Expand Their Use of Online Marketing Tools:  Despite the economic downturn, we expect the small business sector to increase its use of online marketing tools and methods in 2009.  Online marketing is cheaper and often more effective than traditional approaches.  And although online marketing can be complex, many tools and methods are accessible to DIY small business marketers.  With small businesses focused on customer acquisition and re-defining their business methods, we expect their use of online marketing to grow in 2009.

1.  The Recession Drives Small Business Innovation:  With the economy mired in a deep recession, small businesses will focus on cash flow, cost containment, customer retention and survival.  But economic stress will also lead to a wave of small business innovation.  Driven by the need to improve productivity and increase customer value, small businesses will re-evaluate, re-design and refine their products, processes and business models.  Despite the adverse economic climate, innovation will create new opportunities for many small businesses.

  

2.  Government Plays an Increasing Role in the Economy:   Economic turmoil, corporate malfeasance and regulatory failure are leading to much greater government intervention in the economy.  While we believe that the long term, global trend towards market capitalism continues to be strong, governments around the world will take a more active role in managing and regulating their economies.  Small businesses will need to be aware of federal, state and local government policy and program changes and their impacts. 

  

3.  Global Infrastructure Spend:  President-elect Obama and his transition team are preparing a massive, $850 billion economic recovery package.  China, Japan, the EU and other countries are also developing large infrastructure spending programs.  In the US bridges and roads, alternative energy, transportation, clean tech and education will likely see substantial federal spending increases with the impacts likely being felt in the second half of 2009.  Small businesses will benefit directly through government contracting programs targeted at them and indirectly through providing goods and services to larger firms.

  

4.  The Number of Small Businesses Will Increase in 2009:  With job losses high and traditional employment options limited, many will turn to self-employment and small business in 2009.  The prior three recessions have seen small business formation rates increase.  And with it easier and cheaper than ever to start small or personal businesses, we expect a strong year for small business formation – especially personal businesses.  Failure rates will also increase, but not enough to offset the number of new small and personal businesses. 

  

5.  Small Business Globalization Will Temporarily Slow:  While we believe the long- term trend towards small business globalization is still strong, we expect small business globalization to slow in 2009.  The primary reasons are the global economic slump, turmoil in currency markets and small businesses focusing on local markets.  We expect small business exports to pick up in late 2009 as the global economy starts to recover. 

  

Demographic Trends

 

 6.  Baby Boomer Retirement Problems Will Lead to Increased Interest in Small Business:  We’ve long forecasted that baby boomers will stay in the workforce past the traditional retirement age.  Current economic turmoil makes this trend even stronger.  Baby boomer retirement has taken a series of major blows.  The value of their homes, retirement savings and inheritances has all declined substantially.   Many have lost or will lose their jobs.  Boomers will have to extend their working years and small and personal businesses will be their best, and in many cases, only option.

  

 7.  Generation Y Will Turn to Small Business:  Gen Y will continue to be be more entrepreneurial than youth in recent generations.  The economic slump will make this trend stronger as many Gen Yers face limited traditional employment opportunities.  With their risks and opportunity costs relatively low, many Gen Yers will choose to start or work for small or personal businesses.

  

Technology Trends

  

8.  Mobile Computing Continues Strong Growth:  On our list last year, mobile computing is entering the US mainstream.  Notebooks outsold desktop PC’s in the second half of 2008, smart phones sales continued their rapid growth and millions of netbooks (very small personal computers designed primary for mobile internet access) were sold.   Adding the continued rapid growth of navigation systems, location-based services and mobile search results in mobile computing having a major impact on small businesses in 2009.

9.  Cloud Computing Continues Strong Growth:  Another trend that was on our 2008 key technology trends list.  Cloud computing offers too many small business benefits not to continue its strong growth in 2009.  In particular cloud computing lowers capital costs and turns fixed costs into variable costs – two powerful attributes that are very attractive in a down economy. 

10.  Small Businesses Will Expand Their Use of Online Marketing Tools:  Despite the economic downturn, we expect the small business sector to increase its use of online marketing tools and methods in 2009.  Online marketing is cheaper and often more effective than traditional approaches.  And although online marketing can be complex, many tools and methods are accessible to DIY small business marketers.  With small businesses focused on customer acquisition and re-defining their business methods, we expect their use of online marketing to grow in 2009.

Comments

[unityworx]

You make sense out of the most complex topics.

[who is domain name]

Steve, interesting list. Re: #7, I think youre right. As a Generation Y-er myself, I can tell you theres a lot of concern among my peers that the jobs and career opportunities we thought we could count on are disappearing. As a result, I know several people personally who have decided to go into business for themselves. I actually think this ties in pretty nicely with your #10. Our relative comfort with web-driven technologies provides an opportunity many in my generation will find difficult to ignore.

Happy New Year!
Katie Langston
+1

[Christopher Bricks]

I know I'm visiting this post almost 2 years later, but it's been pretty cool to see how some of your predictions are coming true. I don't know enough about the small business and demographic trends to make a judgement on those, but you nailed all three of your technology trends. Fun to look back on these kind of posts few years later. Thanks

[Cameron Scott]

This top 10 small business trends can help inform entrepreneurs so that they can innovate in the fast-changing business industry. Not everyone has the guts to be innovative and take risks. Every reader will appreciate how the economic, demographic, and technology trends are separated and specifically explained.

[Minneapolis SEO Company]

Steve, how dead on were you. While most of what you said came true and is continuing to evolve, I was impressed that you mentioned smart phones. They were being used and were growing but who knew that they would grow so rapidly or that small businesses would be able to take advantage of both the internet usage that comes with them but also sms.

I would love to see your outlook for 2012.

[Carol]

Interesting list. Looking back to it, most of it happened. Especially 8 and 10 because of a very recent fall on our market.

[Part Time Cfo California]

Another trend is businesses utilizing social media in order to promote their business. It's cheap (free if you are pc literate) plus there are more people online than ever.

[Kristy Lewis]

even though its 2011 now I still think these trends are still applicable. I still believe these will be the trends for the next 5-10 years which will be really interesting to see materialize.

[Kathryn McDwell]

I'm looking into number 10 right now because there are a lot of businesses that are venturing into internet marketing right now. You know how a company should use all of the available resources to expand, right? Just as Ms. Burruel has mentioned, companies have to take risks. Here in my hometown of Tennessee, the businesses are using social networking sites like Facebook and Twitter for promotion and advertisement. I guess it's time that companies should use it to their advantage.

[Staci Burruel]

I've read some stuff about starting a local business during the recession somewhere in the internet. According to that blog, it is one of the great advantages of the recession. You've pointed it out in the first trend that you've mentioned. The chances of failure are still there though. But are you really going to fail if you have effectively planned good marketing strategies for your business? You can use a lot of tools for promotion.

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If small businesses will require 60-80 weeks of work, if the baby boomers will not itnerested. We see an opportunity in this area for baby boomers to use their skills ..

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[Jeffrey "Best Home Based Businesses" Mangulabnan]

Yeah, me too! will start a small business if that it's the case. anyway, nice post.

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Recession definitely drives small businesses. I can see that and more people had their business to make money after they lose their job.

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[Texas Adult Drivers Ed]

Very informative and useful tips, though i found it too late. Makes sense, I love your form of writing, its unique and in a good way!

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[Website Design Firm]

Thanks for the very informative post Steve, you hit the nail on the head, small business is in huge growth right now , and only getting bigger. Ive been working for myself now since university 10 years ago, and love it!

[SEO Company]

Well don't know whats going on but its not a Good way to do this. in my opinion we have to look again about this issue