10 Things Small Business Owners Need to Know
By Rieva Lesonsky
1—Best Small Business Startup Industries
SCORE has identified the most promising growth industries for small business owners looking to start a successful small business. They include:
Food and drink
- Online grocery stores: This shopping option is expected to grow 21% annually.
- Chocolate: U.S. chocolate confectionery sales are projected to hit $25 billion by 2019.
- Craft beer: Sales doubled between 2009 and 2014 to $20 billion.
- Home health services: Jobs for home health aides should grow 48% by 2022.
- Corporate wellness: Fitness programs and wellness-tracking software are expected to grow 8.4% annually.
- Mobile shopping: By 2017, more than half of Americans will make a purchase viat their smartphones.
- Online fraud detection: Cybercrime software is projected to generate $1.78 billion by 2020.
- Drone manufacturing: Already a $3.3 billion industry in the U.S., drone design and manufacturing is projected to grow to $82 billion by 2025.
- Biometrics: Body scanning for security applications may grow from $7.7 billion in 2014 to $44.2 billion by 2021.
- Green construction: This industry is expected to generate more than $303 billion over the next three years.
- Translation: The global market for language services and technology will hit $49.8 billion in 2019.
- Americans already spend nearly $20 billion per year on pet care, a trend Millennial pet owners are expected to maintain.
Check out the infographic below for more information.
2—Small Business Perspective
The second annual Bank of the West Small Business Growth Survey shows that 86% of small business owners says everything they’ve sacrificed for their small businesses, including uncertainty, long hours and pressure has been worth it. The survey also shows that small business owners have experienced growth and are optimistic about the future of their businesses amid an uncertain economic and political climate. Plus, 70% of the companies surveyed were in growth mode—up from 64% last year. The index tracks four key indicators over the previous 12 months: profitability, revenue, investments, and reductions.
The Challenges: Living with the uncertainty that comes with owning a business (52%), always being on the job (43%) and avoiding burnout (40%). Small business ownership also comes with a number of personal and professional financial worries: making and saving enough to retire (41%), ensuring their families are financially comfortable (35%) and managing cash flow (31%).
The Rewards: For the vast majority of small business owners, the benefits outweigh the negatives. They cite a level of freedom and flexibility not afforded by a traditional 9-to-5 job as unique benefits of being a business owner: 94% say owning their own businesses puts them in charge of their own destinies, 91% love the freedom that comes with owning a small business, and 83% feel empowered by running their companies. In addition, 84% say owning a small business allows them to contribute to the local economy and 80% say their small business helps them make a positive impact on the community.
Family matters play a large role as well: 70% of small business owners say their small business provides them with opportunities to connect with their families and 67% feel they’re providing a legacy for their families through their small businesses.
Leadership Qualities Are Key to Success: The small business owners say the essential ingredients for success are personal leadership qualities, with passion for work (70%) and self-confidence (64%) at the top of the list, followed by having a clear vision for the business’ future (49%) and offering an innovative product or service (38%).
The top five pieces of advice that current small business owners would give to those just starting out are:
- Make time for your family (62%)
- Don’t be afraid to ask for help (58%)
- Separate your business finances from your personal finances (57%)
- Stay objective; don’t take things personally (55%)
- Be a lifelong learner (54%)
Businesses Maintain Confidence: The survey shows small business owners are feeling emboldened, despite their lack of confidence in the general economy and an uncertain political climate. While 40% have a negative outlook for the economy in the year ahead (up from 35% in 2015), an overwhelming eight in ten (81%) have maintained a positive outlook on their own businesses over that same timeframe.
The business owners are feeling optimistic about their futures. In the near term, 91% expect their business’s profitability to either increase or stay the same over the next 12 months and 52% say their businesses are poised for significant expansion in the next year.
Business financials over the past year show a stable growth trend across the small business sector, as seen in the Bank of the West Small Business Growth Index score—at 55 for 2016, up from last year’s 54. In fact, 70% of the small businesses in this year’s survey fall into the Index’s growth category—reflecting a combination of increases in profitability and/or revenue, as well as investments back into their companies.
3—Money Can’t Buy Workplace Happiness
EventBoard, a developer of cloud-based meeting tools and analytics that help maximize workplace productivity, recently released results from its inaugural Employee Happiness survey, showing how new technology helps workers be more content and effective. The report reveals higher salaries don’t necessarily equal contentment, that mismanaged meetings are a key contributor to workplace conflict and employees want to implement their choice of technologies.
Employees who are happier are significantly more productive than unhappy workers, according to recent data. This means in order to encourage productivity, businesses not only have to keep their employees happy, but need to find new ways to help them work smarter, not harder. This may call for administering technologies that help to ensure that employees can connect and collaborate effectively. The EventBoard data reveals important factors that play into workplace happiness:
- Money Can’t Buy Happiness: Over 40% of survey respondents making $75k+/year are ‘not happy’ in their current workplace; while 58% of those making less than $75k/year are “happy or very happy” at work.
- Role Call: All employees say meetings that run long are the #1 source of workplace conflict
Happiness is Key: Although the majority of workers are generally happy with their jobs, nearly 40% of employees still struggle to find happiness in the workplace.
- Millennials are Happier: 56% of Millennial respondents are ‘very happy’ at work
- No More Drama: 41% say conflict resolution is important in overall workplace happiness
Meetings Matter: Most respondents spend at least one to two hours of their workday in meetings. Booking or reserving meeting rooms is one of the most common causes of workplace conflict.
- 41% of respondents say attendees miss meetings somewhat often due to conflicts or other commitments. According to data from EventBoard’s built-in analytics, in the past 30 days 18% of scheduled meetings never happened because nobody showed up.
- Nearly 60% say meetings that run over are a source of workplace conflict
Missed Connections: Employees are still not getting the technological tools they need to complete their tasks as efficiently as possible. Because of this, employees feel the need to supplement provided workplace technologies with their own.
- Over 50% of employees have to supplement workplace technologies with their own
- Nearly 40% of employees would be motivated by innovative tech tools compared to 20% who would be fueled by out-of-office perks, such as health club reimbursement or discounts on products or apparel.
- Millennials are the most likely to supplement lackluster workplace technologies
Check out the infographic below.
4— Credit Card Debt: The Problem, Fixes and Prevention
Consumer spending is on the rise which can lead to consumers increasing their credit card debts.
According to MassMutual’s State of the Hispanic American Family study, among Hispanics’ top financial goals, nearly half prioritize getting out of credit card debt as a top priority, compared to 29% of the general population. But, the average amount of credit card debt held by Hispanics is 20% higher than the general population ($15,573 vs. $12,553). In addition to getting out of credit card debt and paying off the mortgage, Hispanic families are more concerned than the general population with making sure that their families will be taken care of financially if they become disabled (36%) or pass away prematurely (35%).
As the economy improves now is a good time to improve your personal finances. MassMutual has some suggestions for steering clear of credit card debt:
Don’t buy a $1,000 pizza: Look at what you’re buying and why. You may think you spent $40 when you charged a couple of pies from your local pizzeria, but if it takes you five years to pay off the debt, your pizza actually cost you $1,000. Charges for items you would never want to pay interest on should be flagged.
The Fixes: Make a list of what you owe monthly per card and the card’s annual percentage rate (APR). Have a specific goal in mind for cutting debt like “I want to pay $50 per month per card over the minimum” or “I want to cut total monthly payments by $200.” Meanwhile pay off the credit cards with the highest interest rates or are the most tempting such as department store or electronic chain-specific cards.
Get Your Free Credit Score: The Fair Credit Reporting Act (FCRA) requires the three biggest credit-reporting agencies—Experian, TransUnion and Equifax—provide consumers with a free credit report annually. To get yours, visit the central website the three agencies set up: AnnualCreditReport.com.
Prevention: Planning for bad times and unexpected expenses in the present is a key part of avoiding credit card debt problems in the future. Experts agree that everyone should have an emergency fund. That way if you get into trouble again, it’s better to cash out that fund than to add to your credit card debt. Without preparation, these developments often lead people to turn to their credit cards and subsequently get burdened with overwhelming credit card debt again.
If you have a family or people who depend on you and your financial well-being, life insurance is also something to consider. Aside from the protection life insurance offers some types can offer a source of funds in the future, albeit with some negative consequences in certain circumstances. Making such moves now may help you handle future expenses that would otherwise push you into a credit card crunch.
For more information, visit MassMutual.com/Latino.
5—Workers Want Better Health Care Benefits, Not Perks
One Medical Group, a leader in technology-enabled primary care, conducted a nationwide survey of professionals to get their opinions, desires and perceptions about their companies’ employee benefits program. The data shows health benefits can make a significant difference in people’s job satisfaction and may even impact their choice of jobs. The study also suggests that despite offering health insurance options, many companies still have some work to do when it comes to keeping their employees healthy and happy. Key survey findings include:
Benefits can make a big difference in people’s job satisfaction. Almost universally, working professionals say employee benefits have a big impact on their workplace satisfaction—59% say employee benefits are “very important” to how they feel about their jobs and their employers, and 36% say benefits are “somewhat important” to how they feel.
Benefits are most important when it comes to attracting and retaining seasoned professionals. The study shows 58% of workers over 60 rate benefits as “very important”, as do 66% of those aged 45-60, and 59% of 30-40-year-olds. Only 45% of 18-29-year-olds rate benefits as “very important”.
Employee benefits can also make a big difference for people when they’re deciding between competing job offers, with 69% saying they might choose one job over another if it offered better employee benefits.
People want their employers to focus on their health. When it comes to which types of benefits are most valued, respondents voiced a strong preference for health benefits. In fact, 2 out of 3 professionals would rather have better health and wellness benefits than more perks.
The study also shows professionals want their employers to play a bigger role in their health and wellness. A majority of respondents (64%) believe that keeping them healthy should be one of the top goals of their company’s benefits program. And yet, only 49% think that health is actually a top priority for their companies.
Companies aren’t doing enough to keep their employees healthy. According to the survey, many employers offer a range of different health and wellness benefits. Most companies are providing medical insurance (82%), and about half are investing in health and wellness programs. The most common programs offered include employee assistance programs (46%), on-site vaccinations (40%), fitness benefits (31%), workshops (27%) and on-site health screening (21%).
But the data also suggests businesses need to carefully review which of these programs have a meaningful impact, because in spite of these programs, many professionals still believe that their employers aren’t doing enough to keep them healthy. Only 52% say their employers are making sufficient investments in their wellness and preventative care, and only 25% think their company’s health and wellness programs are actually making them healthier.
6—It’s a Matter of Trust
Check out the results of the latest SMB Trust Index from Alignable. It shows the brands small businesses trust the most.
7—Increasing a Restaurant’s Chances of Getting a Loan
Guest post from PiinPoint, a location analytics company.
The failure rate for restaurants is extremely high—60% of new restaurants fail within the first year. Given the high-risk nature of these types of businesses, banks generally do not like to lend small business loans to hospitality businesses, some even forbid it.
So, how do you increase your odds of securing a loan? Business owners must arm themselves with as much factual information as possible so they can build a strong business plan for the banks. Here are three ways to get the market insights crucial to securing a small business loan.
- Big Data. Concrete data around demographics, traffic counts, market saturation, and nearby business listings that can, should be included in a business plan to increase confidence in sales projections.
- Gain a competitive edge. Banks are approached every day by small businesses looking to get financed, so it’s important for businesses to provide insights into external risks and opportunities that most other businesses don’t have access to, such as whether the daytime population in the area will increase or decrease in the next five years, or when construction in the immediate area will begin.
- Reduce time to market. The process of building a business plan can take months: selecting a location, finding available real estate, researching the various factors that will affect business, and ultimately calculating sales projections and profit margins. Using services like PiinPoint significantly reduces the time spent on research by compiling and deriving insights from all the data available in a matter of minutes.
SnackNation, the healthy office snack delivery service, added a first-of-its-kind breakfast delivery box for offices. Offering snacks to employees produces happier, healthier and more productive employees. When offered snacks many employees not only perform better, but also feel appreciated.
SnackNation recently found that 65% of employees want healthy onsite food choices. SnackNation just launched its first Breakfast Box to its members. Each breakfast box will have a mixture of bars, granola, cereal, smoothies and oatmeal and only include products that contain natural or whole ingredients, are low in sugar and high in healthy fats, fiber, and lean protein.
Studies show eating breakfast increases concentration and kick-starts the body’s metabolism. Yet nearly 31 million people skip breakfast, according to NPD Research, leading to decreased productivity.
9—Saying Bye to Paper Checks
Starting this month Bank of America says it’s “going to help their 3.2 million small business customers know for certain when they will get paid and ditch paper checks.” This should help these business better manage their finances while saving about $4 to $20 per check (based on estimates on the actual cost of a check). That adds up to a cost saving of $420 billion.
Bank of America small business customers will have a direct integration within their online banking account to Viewpost, the new invoicing, payments and cash management network. This is the first-of-its-kind integration between a third-party vendor and a major bank to service small business customers. Customers can use their same bank login credentials to access the payments network and any B of A business bank account can be instantly added.
10—New Backup Solution
Acronis, a leading provider of hybrid cloud data protection, just announced Acronis Backup 12, its game-changing new solution that protects a businesses’ full digital image. With most business assets now being digital and not confined to a single device or location, businesses need a backup solution that is designed to provide complete data protection to support this new way of operating. The new solution has the ability to backup and protect company data in today’s hybrid cloud IT environments—whether it resides in the cloud, on-premises, across virtual and physical systems, in remote systems, and on mobile devices.
“Data is the lifeline of today’s digital businesses—without it your company will not survive,” says Serguei Beloussov, cofounder and CEO at Acronis. Legacy backup solutions do not provide adequate protection due to the increasingly complex IT infrastructures in use today with multiple physical systems, virtual environments, cloud workloads, and more mobile devices. Companies also face greater risks and vulnerabilities related to external threats like Ransomware, which has seen a 400% increase in mobile device attacks since 2014. As a result, “improving data backup and recovery consistently ranks among the top IT priorities for organizations of all sizes, year over year,” according to Enterprise Strategy Group (ESG).
Acronis Backup 12 gives businesses complete control over the location of their data, systems, and backups, including best-in-class capabilities for protecting virtual environments. As a result, IT managers always know where their company data is located and who has access to it, even when stored in the cloud. And in the event of data loss, Acronis Backup 12 provides businesses with a range of recovery options.
Acronis Backup 12 is available by contacting a local Acronis partner—go to the Acronis partner directory for information.