Today's trends for tomorrow's business
Small Biz Challenges
November 27, 2018
As the year comes to a close, you may be thinking about champagne toasts, winter getaways and starting 2019 with a bang. You might also be wondering how your business will do in the New Year.
This tends to be a time when smart businesses take a step back to assess and evaluate where they’ve been, how they’ve done, and project where they think they can go. Hopefully you’re already busily charting the course you want to take in coming months.
Of course, you also need to be aware of the hurdles you might face so you can prepare for overcoming them - maybe even converting them into opportunities.
Here are some of the key small business challenges to watch for in 2019:
1. Finding good help
A common refrain among small business owners is that it’s tough to find good employees.
That’s even truer right now because unemployment is at a record low (below 4 percent), and every business is having to compete for smaller pools of talent. In fact, in a recent Statista survey, small business owners identified “quality of labor” as their most important problem.
Don’t expect that to improve much in 2019. While the booming economy could very easily hit pause, it will take time for more qualified candidates to become available. Every small business owner, therefore, will need to focus on creative ways to attract new talent, such as offering flexible remote work options, generous vacation packages, career training and development, and modern technology.
2. Standing out on social media
Industry pundits will tell you it’s critical to advertise on social media. If you’re not on Facebook, Instagram or Twitter, you shouldn’t expect to grow your business, they say. And that’s true.
What they don’t tell you is that advertising your brand on those sites is a little like having a poster on the side of a Las Vegas strip building - some folks will see it as they stroll by, but there’s far too much competition for attention nearby to make them very effective.
Because 96 percent of small and medium businesses (SMBs) use social media in their marketing strategy, your challenge in 2019 will be to stand out in the crowd.
You will have to spend considerable time building compelling, well-branded stories and making them as visual as possible, using personalized video, chatbots or any other new technology that will set you apart. It will also be important to cross-pollinate your marketing efforts, making sure any Web, social, mobile or in-store ads all point to one another.
3. Deploying the right technology
Small businesses constantly grapple with cash flow, so hearing they need to stay ahead of technology doesn’t often land well with them. But in 2019, competing in this super-heated economy will depend on how wisely you apply your funds to improving operations and attracting customers.
For guidance, it’s important to know where other small businesses are investing. A recent Capterra survey found SMBs are primarily spending in four areas: finance and accounting, cloud computing, data security and digital marketing. A good rule of thumb would be to start with these four areas and divvy up your budget almost equally between them. Acquire the most modern hardware and software to stay current with market and employee expectations, and constantly assess how well your technology is performing for you; you should never stay married to anything that isn’t working.
Small business owners often think they’re largely immune from cyberattacks. That hackers only target large organizations because that’s where the money lies.
In fact, 82 percent of small business owners believe they’re not targets for attack because they don’t have anything worth stealing, according to Towergate Insurance research.
But the reality is hackers target small and large businesses almost equally, and nearly half of U.S. small businesses experienced one or more cyberattacks in the past year, according to a recent Hiscox report. The cost for these breaches? Nearly $35,000 for each small business, Hiscox says.
In 2019, it will be critical for small businesses to overcome their natural aversion to spending money on cybersecurity and spend time on a security strategy that includes a layered approach to fortifying assets. This involves not only protecting your network with firewalls and antivirus software but purchasing endpoint devices as well - laptops, smartphones and printers - with built-in security features. It also means implementing strong security policies and procedures for employees, so they don’t become unwitting partners in a hacker’s efforts to penetrate your network and steal information or assets.
5. Tax laws
Every year, you can count on some tax law changes affecting how you conduct business.
The Internal Revenue Service (IRS) suggests you get to know the Tax Cuts and Jobs Act, passed in December 2017, which includes changes that are already affecting virtually every business and individual – and will next year as well. Among other things, the new law could change your tax rates and affect the quarterly estimated tax payments you file.
For many passthrough businesses, the law changes created a new 20-percent qualified business income deduction. Other deductions and credits have been changed as well, including revised depreciation methods and expanded options for expensing business property. There are also new rules for like-kind exchanges and fringe benefits. In addition, small business employers who provide paid family and medical leave to their employees during tax years 2018 and 2019 may qualify for a new business credit.
Refer to Tax Reform Provisions that Affect Businesses page for more information.
As the year ends, it’s important to think through where their company has been, where it wants to go and then plan accordingly for the year ahead. You’ll almost certainly face a range of challenges. But with proper research and planning, every one of those can be converted into a promising growth opportunity.