What lies ahead for small business owners and entrepreneurs? Many people I’ve talked to feel like they are living in a Dickens novel.
It’s the best of times: “The economy is going strong, driven by consumer spending,” says Sharon Miller, managing director, head of small business for Bank of America. She says according to bank data, “consumer spending is up 5.5% on $3 trillion worth of transactions, which will help drive momentum into 2020.”
It’s also the worst of times: Many small businesses are struggling to find qualified employees to fill jobs, are baffled by the rapidly changing world of digital marketing, and are facing numerous other challenges.
To get some answers I turned to business leaders, entrepreneurs, and thought leaders to get their insights and perspectives on what 2020 (and the new decade) has in store for small businesses. Of course, there are no guarantees. But hopefully, as my friends at Fundbox say, these “trends bear a history and trajectory that demonstrate their value in guiding your company’s efforts—and ones you can “depend on to help gain a competitive advantage in 2020.”
SMB general outlook for 2020
Jon Fasoli, Vice President & Small Business Segment Leader, Intuit
Worldwide there are 800 million self-employed professionals and small businesses, which make up 98% of all businesses and employ 60% of the global workforce. Yet the odds of succeeding are stacked against them. Half of these self-starters and small businesses fail in the first five years, two out of three in the first ten years. Additionally, 59% of private sector economists expect a recession by 2020 and 71% of small businesses feel there will be an economic recession in the next two years.
In spite of this, small businesses around the world are maintaining a positive outlook. According to a recent study by Intuit QuickBooks and Wakefield Research, although SMBs are concerned about the economy, they feel confident in their businesses: 48% of small businesses think their revenues will increase in the next 12 months, anticipating an opportunity for more hiring and more work.
Meredith Schmidt, EVP & GM, Salesforce Essentials
Small business owners and leaders are feeling positive about the future as we head into 2020. Confidence is up, and they expect revenues to rise too (according to a WSJ/Vistage survey of small business CEOs). That sense of optimism and certainty is going to propel small businesses to new heights because they are comfortable taking risks, hiring more, and expanding their goals.
Charley Moore, CEO, Rocket Lawyer
Your business should be able to flourish no matter who the president is. And I think that’s especially true for small businesses. On the other hand, who’s in charge does matter, so you should really understand in your business what policies are opportunities and threats for your business.
If you’re a business that relies on immigration, like much of the tech sector, the tightening of H-1B work visas for skilled tech workers has been a real challenge for Silicon Valley companies. With all of these various policies, it’s important for small businesses to understand what policies are opportunities and what are threats to their businesses. From a business standpoint, owners should plan and participate accordingly.
Sharon Miller, Managing Director, Head of Small Business, Bank of America
On tariffs: Miller notes the Fall 2019 Small Business Owner Snapshot from Bank of America showed many small business owners were affected about tariffs. Going into 2020, the tariff situation is “uncertain” and that is concerning to small business owners. She says, “The concern about tariffs is up three points from the Spring 2019 Snapshot and nine points from Fall 2018.” The increased tariffs have led to a rise in the cost of goods, which “55% of the business owners are passing along to their customers.”
Charley Moore, Rocket Lawyer
On a potential recession: No one knows when a recession will happen, everyone knows that it will. You should always be ready for a recession, especially now that we’re in the late stages of an economic expansion. I think a business should aspire to have durability and manage prudently. There’s no better time to be in business than a time when all of your competitors are struggling and you’ve got resources.