6 Small Business Components Trends & Predictions for 2018
As we are well into the third quarter of 2018, it is critical to take inventory of how businesses have been affected, and especially compare these effects to respective early 2018 business predictions. One thing is for sure: 2018 has been a whirlwind- full of both expected and unexpected changes. Regardless of the industry: public policy, technology, finance or marketing, developments have been rampant in the business world. Certain predictable ongoing trends, results and numbers were present, but certain unpredictable trends emerged. The question on everyone’s mind is a question concerning where the United States’ business world currently stands and what the future holds for it.
At Thomas Huckabee, CPA of San Diego, California, we know the immense importance of these questions to you and your clients. To facilitate the understanding of today’s business state of affairs, we have written a post containing our best assessment of how the rest of 2018 will look, by category and sub-category. We will review the following and many of their very relevant subsets:
Here we go!!
- Tariffs Render Uncertainty Despite a Strong Economy
The American economy is in impeccable condition right now. Experts agree that it can absorb two or three more quarter-point interest rate hikes prior to 2019 without risking any noticeable positive or negative effect. Newly introduced American tariffs, however, have sparked worldwide revolt and controversy…and could potentially lead to a trade war.
- Radical Shift in Banking Models Begin
Today’s generation knows what it wants and gets what it wants: it’s members want to bank wherever and whenever they want, details which do not align with traditional banking models. Digital banking is anticipated to increase to more than 2 billion users before 2020. As a consequence of this shift, the standard brick-and-mortar banking solution will be updated and a technology first-mindset will replace the past’s model.
- More Mobile Cyberattacks Due to Mobile Banking
Attacks on anything related to mobile banking are at an unprecedented level. There is nothing looming on the horizon to suggest that this trend will not continue. In fact, expect it to do so. Around the vicinity of 80 percent of financial institutions’ clients use online banking; of that 80 percent, 50 percent are mobile- a figure that is growing rapidly. And, the more rapidly that percentage increases, the more rapidly the opportunity for attacks increases.
- Modern Banking & the Importance of Speed
Banking channels will strive for warp speed. All banking services and other banking channel players are rushing to acquire better online capabilities and move faster. We expect this race to continue indefinitely as the industry strives to eliminate middlemen and enhance the client experience.
- Addressing the Deficit
Currently, the deficit is not a topic of discussion. The Tax Cuts & Jobs Act’s (TCJA’s) recent tax cut is substantially raising the deficit. One of the only known ways to fund a deficit is to increase borrowing. The other known way is to increase taxes. Mark our words that resolving the deficit will become a very large point of contention and a large problem.
The Marketing and Advertising
- Growth in Small Business Cross-channel Marketing
In contemporary society, it’s extremely rare for small businesses to conduct any advertising of the cross-channel nature. Instead, it is far more common for small business owners to segment their vendors for Google, Twitter, Facebook, general content, web maintenance and so on. Larger brands, with their larger resource bases, are pseudo-experts at doing this considerably well. It is our prediction that we will witness small businesses taking some hints from their larger competitors’ integrated strategies, and subsequently and see these small outperform a bunch of competitors.
- Social Advertising Competition at an All-time High
Not that social media advertising has ever been off the radar, we predict that paid social ads for websites such as Facebook, the 2018 landscape will continue to gain momentum and become fiercely competitive. While larger businesses jumped on the Facebook advertising bandwagon ages ago, there is definitely significant long-tail growth among SMBs in the Facebook arena. The end result of this is that Facebook will not only maintain but increase, the number of advertisers it has with SMBs and CPM and CPC costs will rise for all Facebook advertisers.
- Marketing Personalization
Marketing is becoming increasingly and almost scaringly personal. Our team does not see any changes in this trend on the horizon for the rest for 2018. Stock images (think Getty Images), generic nurturing campaigns and impersonal calls to action are no longer effective. In order to be a leader in your industry, it will be essential for your small business to offer relevant, high-value and personalized content at all times.
- Modern Marketing Tools Facilitate Personalization
Although marketing in the form of email has traditionally been a one-to-many way to market, it’s a terrific example of this trend as we continue to see an upward shift in focus on more customized messaging. A significant catalyst behind this shift toward one-to-one can be attributed to advances in personalization technology, particularly click segmentation. Personalizing emails is especially valuable because small businesses usually offer a variety of products and services, because not each and every product or service will always appeal to every customer on an email distribution list.
- AI Emerges as a Priceless Marketing Mechanism
AI has been used in the past by executives to schedule their calendars, but 2018 will witness the conclusion of this experimental phase and the start of applying AI to solve crucial marketing issues. As an example, conversational AI businesses will allow PR companies to use conversational AI for lead nurturing and obtaining new clients. Customer service, in turn, will be streamlined, although experts contend that the human touch will always be necessary.
The New Age & Modern Workplace
- Workplace Evolution
The physical workspace, as we know it, is about to change remarkably in 2018 and 2019 as small businesses begin to get savvy about how to drive productivity and adapt to new employee behaviors and developments in technology. Large companies have already reduced their real estate commitments and liabilities and shifted to flex desk options, while also permitting more employees to work remotely or from home. Employees will be connected but they will be using better tools that help them complete work more effectively and efficiently.
- Anti-harassment Policies Strengthened
With practically every eye being focused on male behavior in 2018, the remainder of the year is going to produce a plethora of anti-sexual harassment training in workplaces, as companies revamp their anti-harassment policies.
The State of Machine Learning & Artificial Intelligence (AI)
- AI Implementation Reveals Large Meccas of Data
Until recently most businesses have been focused on developing teams and creating robust data pipelines. However, data, in its original form, has not resulted in much disruption. In the remainder of 2018, the right people and the right tools in place will allow companies to focus on utilizing data to drive growth. Companies will look to integrate AI into the equation so to gain a competitive edge.
- Client Responsiveness Increases Due to Machine Learning
Machine learning will have a much larger role in client and sales support. A decrease in costs combined with an increased availability of speech analytics tools will generate a streamlined process in which more small businesses can record and monitor calls via contact centers. Rather than guiding callers through endless prompts, speech analytics will help to categorize customer inquiries and analyze responses, in terms of what is said and how it is said.
The Internet of Things (IoT)
- IoT Cyberattacks Increase
A marked increase of IoT hacks and attacks will be a definite result because hacking tools are very simple to find and use. Another key factor is the increase in the number of unsecured IoT devices. In 2017, Gartner noted that there were eight billion connected devices in 2017 and that number will increase to 20 billion connected devices by the year 2020. As it stands now, basically anyone can use the dark web and begin using available malware code, not to mention the readily available services such as hacking, malware- and ransomware-as-a-service, which can all be employed at a very cheap cost. It’s very simple, even now, for someone with very little knowledge to launch a sophisticated attack with a financial motive. Data collected confirms that the past three years, business compromised business emails alone generated $5.3 billion.
- IoT Devices Become More Reliable & Secure
Don’t be surprised if you see a couple large-scale, botnet-style cyberattacks on IoT-related hardware. To combat this, any industrial space is going to be more than likely to take a hint from big business and its consumer space, where pertinent device updates are downloaded automatically instead of manually, hence giving the user very little say in the app or operating system arena.
The General Technology & Cybersecurity
Rise of the Sharing Economy
Overall world-wide digitization and an economy of the sharing nature will result in upheaval across more industries. To date, retail (Amazon), server market (Google, Amazon) and automotive (Uber, Lyft, Zipcar) have all been disrupted. Combine this with no serious upheavals in the past two years, financial services and healthcare will most likely be the next victims of disruption.
Significant Shift in IT Spend
Dedicated security measure coming out as operation center directives will represent a shift away from prevention towards detection and business reactions. Hybrid security services which combine on-premise and cloud remedies will become the dominant architecture with clients starting to integrate these offerings.
Thomas Huckabee, CPA of San Diego, California is a small business expert who is can help walk your business through upcoming changes in the business environment. Operating a full-service accounting firm, Tom guides clients through the difficult process of setting up a small business with a forward-looking approach.