6 Small Business Trends for 2020
Check out these trends for the new year.
- January 16, 2020
- 7 min read
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jThe future looks bright for small businesses in 2020 with business owners expressing high rates of optimism as of late. According to a November 2019 report by NFIB, this spike in optimism is reflected in owners reporting improvements in earnings, optimal timing for expansion and expectation that improved business conditions will continue.
At the same time, new, emerging and rising trends in the business and technology world are impacting the way small businesses operate, largely in a constructive way. Despite past fears of technology replacing workers and putting companies out of business, quite the opposite has been happening. Instead, emerging technological trends are enhancing small businesses and their bottom line.
To get your business better prepared for the technology to come, take a lot at the top small business trends for 2020.
Despite long-held fears of a dystopian world in which robots take over human jobs, artificial intelligence has not progressed to that point. Instead, artificial intelligence has advanced immensely, primarily in the direction of augmenting and enhancing the capabilities of human operators. The enhancements artificial intelligence offers can be utilized by small business owners to their advantage.
Knowing where to apply artificial intelligence in your small business is very important. In certain industries and business contexts, customer service power by artificial intelligence instead of humans might be totally fine but can actually backfire in other circumstances.
The principal ways small businesses can harness artificial intelligence is by using it for data management and customer research. In conjunction with big data, small businesses can use artificial intelligence to gather demographic information about customers, track and send updates to them about products or services, manage frequently asked questions, manage inventories, streamlining human resource tasks and much more.
Artificial intelligence can be utilized by small business owners in countless ways, and not just in the form of robots. Customer Relationship Management (CRM) platforms, such as Salesforce, use artificial intelligence to track interactions you have with your customers. Using data gathered by artificial intelligence in this way can be put towards actional steps and building greater revenue.
Big data is all about learning more about your company and your customers. It enables small businesses to know who is buying their products or services, how they use them and why. Big data can unlock trends among the customers that can reveal patterns and opportunities your business can leverage. In the past, big data was so expensive and cumbersome that only larger enterprises employed it. Now, tons of companies and software are focused on big data and providing big data solutions to businesses of all sizes.
It is pretty important for every business to have a big data strategy. The quantity of data alone, however, will not provide a competitive advantage. Big data requires analysis in order to produce clear, practical insights in order to be effective.
Below you’ll find some of the top uses of big data for small businesses:
- Customer Analytics: You can analyze your customers’ behavior on your business website and social media to identify their interests, habits and attitude towards your company and products.
- HR Monitoring: Big data can provide you with insights on your team’s productivity, personal development, team onboarding and many other areas central to human resources.
- Personalized Marketing: Big data can be harnessed for marketing that is better tailored to your customers on a personal level, offering deals and services catered to their persona.
- Detecting Market and Small Business Trends: Even without a massive research department, small businesses can track and analyze development and changes in your market using big data solutions.
Closely related to artificial intelligence is the trend towards greater adoption of automation and automation software among businesses, including small businesses. And also like with artificial intelligence, automation doesn’t simply mean employing robots as workers.
Instead, automation is mostly internal now, being built into various types of management software. Automation software can help eliminate doing mundane tasks, which frees up your employees’ time so they can focus on growth.
Here are some examples of companies who provide automation software for businesses:
- Zapier: Straightforward automation software that unifies and integrates all your various apps and platforms used for business in one place
- ActiveCampaign: A marketing platform that includes advanced email marketing features and CRM
- Mavenlink: Platform that handles project management, time tracking and resource planning
- Asana: A web and mobile application designed to help teams organize, track and manage work
- Workfront: A company that develops web-based work management and project management software that features enterprise work management, issue tracking, document management time tracking and portfolio management
- Leadformly: Helps generate, track and segment leads for your company
Online user reviews are hardly a new trend, but they are increasingly more and more critical to businesses. Customers tend to trust reviews much more than ads or other content that businesses put out themselves. Thus, it’s imperative that small businesses have themselves listed on sites such as Google My Business, Yelp and similar sites that are relevant to your business. According to BrightLocal, 82 percent of consumers read online reviews for local businesses, with 52 percent of 18-54-year-olds saying that they always read reviews. What’s more, it’s not only user reviews that matter but also the responses from businesses. In the same report, among consumers that read reviews, 97 percent read businesses’ responses to reviews.
User reviews can affect small businesses’ bottom line. According to Womply, which collects data on more than 200,000 small businesses in the U.S., user reviews have a marked impact on revenue, and in some unexpected ways:
- Businesses that claim their free listings on at least four review sites earn 58 percent more revenue.
- Businesses that reply to their reviews at least 25 percent of the time average 35 percent more revenue.
- Businesses with 5-star ratings have below-average sales—the ideal rating is 3.5 to 4.5 stars.
- Businesses with more than the average number of reviews across all review sites bring in 54 percent more in annual revenue.
- Businesses whose total number of reviews are 15 percent to 20 percent negative earn on average 13 percent more annual revenue than businesses whose reviews are 5 percent to 10 percent negative.
Every application today has been modified to include reviews and ratings from customers. Small businesses can figure out the spots which are making their customers unhappy and address their grievances. Meanwhile, user reviews also bolster credibility, leader to greater customer loyalty and can enhance sales. User reviews encourage increased customer engagement, which is integral to successful small businesses.
The best way for small businesses to get positive reviews is, not surprisingly, to provide great products and customer service. Following up with satisfied customers can be useful, if done gently, in order to get positive reviews posted. Of course, you should never pressure customers nor pay for fake positive reviews.
Working remotely or working from home has emerged as a prominent trend across the business landscape. If you’ve opened a restaurant, then this trend isn’t too relevant to you and your workforce. But for many other small businesses, especially those with tech-focused employees can conveniently allow remote work outside of the office without missing a beat.
Small businesses have to contend with the fact that the ability to work remotely is a strong desire among millennial employees. There are some cost advantages to remote work that can help small businesses in particular. Infrastructure and space can be a major constraint for small businesses. Real estate is expensive, but growth is essential and small businesses cannot afford to be left behind because of this. Remote working provides a useful outlet for problems of space and real estate when expanding is not an immediate option.
Small business owners might be concerned about productivity and communication breaking down due to employees working remotely. Fortunately, thanks to laptops, smartphones, video conferencing and team messaging, technology has made remote work easier and more convenient than before. In the current tight job market, businesses are competing for employees, and much of the top talent enjoy the ability to work from home as an option at their prospective company. Plus, offering remote work can open your company up to money-saving business moves, such as hiring freelance contractors who can do their work from home.
This business trend goes hand in hand with the rise of remote work. According to a poll by Gallup, almost 36 percent of workers in the U.S. are involved in the gig economy. A large proportion of these gig workers believe it gives them flexibility while at the same time giving them the opportunity to be their own boss.
You might think gig work can’t make an impact on your small business, because gig workers are akin to entrepreneurs. However, this very fact makes them valuable to a small business. Many small businesses might not be in a position financially to hire permanent employees. On top of this, it can be hard for small businesses to identify and hire the right talent, leading to in-house employees that aren’t a good fit and cost your business time and money.
This is where the rise in gig work can been a boon to small businesses. Hiring gig workers as freelance contractors can be a huge money-saver for your small business. Gig workers also tend to be specialized, being technically proficient in what they do. This is perfect for small businesses that need specific types of work and projects done without the costly process of finding and hiring an employee who is in-house and has the requisite skills.
There are always ongoing developments in the business world, but these emerging and rising trends are set to continue and influence the way small businesses operate. All of these trends are united by the heavy reliance on technology to make business operations simpler, smarter, more efficient and more convenient. What’s more, all of these trends are interrelated.
Artificial intelligence, automation software and big data are closely connected to each other, while gig work, remote work and user reviews are all predicated on increased integration between your company and the external world, whether it’s your employees or customers. All of these trends influence each other and can be harnessed by your small business for success in 2020 and beyond.
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