No business sector is more diverse, inventive, and challenging than small business. Each year, millions of U.S. small businesses innovate with new ways of doing business using different technologies and approaches. In a sector that has to move faster, adapt quicker, and evolve more than any other, trends are already emerging for 2016. Here are my top 5 to watch out for:
1. Grassroots Movements
In a business world that caters to the 800 pound gorillas, small businesses are fighting for their rights in city and state-wide legislations by using the internet and social media to mobilize and gain critical mass around issues that affect their community. For example, local business owners in NYC, where my company Likeable Local is based, are coming together around commercial tenants' rights--they are being forced out as a result of higher big box and chain store rents. To fight this, they've formed a movement called TakeBackNYC and have been successfully lobbying to pass a law that would give them the right to renew their leases with fairer terms. For the first time in 30 years, they have achieved a majority of supporters in the City Council and are on their way to making this law a reality. A San Francisco neighborhood started a similar movement when they rallied together in Hayes Valley.
2. Shift in Payment Security
October 2015 marked the deadline for the EMV Liability Shift wherein businesses that hadn't converted to an EMV Chip compatible credit card terminal, would be liable for any occurrence of fraud. Prior to this, small businesses did not have to shoulder the cost of fraudulent transactions.
It is imperative that small business owners make the change as U.S. credit card fraud is on the rise. In 2014, 31.8 million U.S. consumers had their credit cards breached, more than three times the number affected in 2013. Countries that have moved to the EMV system have seen a significant reduction in fraud. For example, the UK saw a 70% decrease in fraud within the first eight years of implementation. Where larger businesses might be able to absorb a major fraud event, small businesses often don't have the monetary buffer to keep them in business. But help is at hand. Just a few weeks ago, Square launched a new mobile payment reader that allows small businesses to accept chip cards and Apple Pay. For those who are still unclear on the effects of the new changes and what actions you need to take, check out this blog on How the EMV Liability Shift Affects Your Business.
Collaboration may not seem new, but we can expect to see more strategic interactions where businesses form revenue-focused partnerships within their neighborhoods and across the city. Local is increasingly important as more small businesses are establishing partnerships in their neighborhoods and cities by using platforms like Townsquared, which is specifically designed to help these interactions happen. In Oakland, CA, small businesses have connected on Townsquared to organize Plaid Friday, a shop local alternative to Black Friday complete with a map to different small businesses in the neighborhood. Plaid Friday has been such a success that 2015 will see 13 Plaid Fridays around the U.S. including Portland, St. Paul, and Minneapolis. Elsewhere in the Bay Area, neighborhoods in San Francisco host events like the Noe Valley Wine Walk every winter or the Hayes Valley Holiday Block Party where businesses across neighborhoods join forces.
4. Stronger Tools for Internet Services
As a result of technology, services that were once only available to multinational companies with millions of dollars in revenue are now only an app away for small businesses. Whether it's food delivery services, advertising, or operational logistics, there isn't anything a big box store can do that a local business can't also do. A few of my favorite examples include PostMates, which extends the reach of local restaurants and groceries with deliveries; Caviar and Chewse, which help restaurants distribute their food to a larger customer base; Beacon which gives small businesses a unique way to advertise to people physically in or around their store through mobile, and of course my own Likeable Local, which automates social media marketing for small businesses.
5. Employment Rights
Small businesses are leading the discussion when it comes to minimum wage laws and health care. With cities like Seattle, San Francisco, LA, and D.C. leading the charge, this local issue has now taken up a spotlight in the national debate as presidential candidates scramble to define a dialogue that's been happening locally for years. The effects of minimum wage will certainly come to the forefront in 2016 and continue into the next decade, with both positive and negative effects predicted. Restaurants across Seattle threatened to close and move when the city passed the $15 minimum wage (phased in over 10 years). Oakland increased wages by 36% in March 2015 to $12.25 and restaurants there have added mandatory service charge to orders or have removed voluntary tips. To date, 29 states and the District of Columbia have minimum wages higher than the federal minimum, and 21 states raised their minimum wage in 2015. It's a hot topic that will only get hotter in the coming years.
These are key trends to think about if you run or work for or with a small business. What trends did I miss? How are these trends affecting you? Let me know in the Comments section below. And here's to 2016 being your best year ever!