It’s the week before Christmas, and while Santa and Rudolph are taking all the headlines, we’re celebrating the amazing work small businesses do all year round. In our Christmas Carol so far we’ve looked at small business past and present, now for the final chapter we’re looking at the future. Read on to find out what the landscape might look like for businesses in the years to come.
The return of the masters
Large corporate players have come to dominate the retail market over the last century. However, as they strive to be unbeatable on choice and price, by having such a vast offering they can’t compete on specialist knowledge.
Consequently, small retailers and manufacturers with local knowledge or specialist offerings are making a comeback. Modern consumers are increasingly hungry for information about their products. They want bespoke, locally produced and sustainable goods. They want to know it’s well made and ethically sourced. As a result, they’re seeking out the specialist knowledge of smaller, independent retailers. Entrepreneurs that can show off their credentials are rewarded with repeat business and growing word of mouth, and carve out a niche where large retailers struggle to compete.
Technology that grows with your business
Not too long ago, having powerful data programmes was the reserve of only the largest firms. They required serious investments of time, capital and staff, and gave the big players a competitive advantage that was out of reach to small businesses.
Now that landscape is changing rapidly. SaaS companies (Software as a Service) and other platforms are democratizing big data capabilities, opening them up to everyone. A small business can take a basic price plan with a limited feature set, then steadily add more options as they grow. They provide enterprise standard infrastructure at an accessible cost. Businesses can then enter new markets and compete on a local, national and international level. As more platforms emerge, small businesses will have fewer limitations and can grow faster than ever before.
Building global brands
Alongside the changes to internal business systems, social media and digital marketing are creating new opportunities to reach customers. Free to set up and simple to use, social media allows small businesses to reach a global audience. Once a luxury for those with big budgets, they can now build brand awareness campaigns to grow their reputation. With a variety of social channels that appeal to different audiences, social media will be an essential tool for long-term growth and short-term sales.
Businesses can use hashtags and trending topics to reach new customers interested in their field. They can also keep existing customers engaged so they keep coming back. Millennials want to feel informed and involved, not marketed to. So, whether it’s sharing your latest product on Instagram or announcing a limited offer on Twitter, engaging customers through social media will help small businesses thrive.
Alternative finance goes mainstream
Already worth £4.6 billion in the UK alone, the “alternative finance” industry is helping more businesses get the funds they need to grow. Crowdfunding is helping businesses get off the ground, while online lending platforms are giving them the finance to grow.
These new funding streams give businesses access to capital at the point they need it. Whereas banks can be slow to respond, online lending platforms can process applications in just days. This allows businesses to respond quickly to changing demands or new opportunities, making them more resilient.
In Q3 2017, more net lending was done to small businesses through Funding Circle alone than the major high street banks combined. As the growth of the sector continues, small businesses will have access to faster, more reliable funding to pursue their ambitions.
AI and bots will fill the gaps
Artificial intelligence (AI) is a computer’s ability to think for itself. It uses information given previously to make decisions, imitating our own ‘human’ cognitive functions. Machine learning is an application of AI that enables computers to learn for themselves as they receive more information.
Why is this important? Typically at small businesses, there are a small number of staff performing lots of different roles. Everyone has to wear multiple hats to get everything done. However, if machines can imitate human thinking, they can start handling some of those business functions, freeing up time and resource.
In the near future an online chatbot could handle all your customer service queries. Open up your normal messenger apps like Whatsapp or Facebook and it could take orders and recommend products. It could even forward documents and even give installation tips. Many will still want to provide a personal service, but AI can help fill the gaps and compliment their existing service.
As discussed in our look at Small Business Present, it’s an exciting time to be an entrepreneur. With consumer habits evolving and technology creating new avenues in marketing, funding and systems, the future of small businesses is packed with opportunities.
Check out the rest of our small business Christmas Carol