2009 top 10 small business trends

Emergent Research

www.emergentresearch.com

2009 Top 10 Small Business Trends2009 Top 10 Small Business TrendsMay 29th, 2009May 29th, 2009

Carolyn Ockels & Steve King Emergent Research


Emergent ResearchEmergent Research

• Our focus is identifying, analyzing and forecasting the trends and forces impacting small business.

– economic trends– social and demographic shifts– impact of technology – changes in industrial structure

• Reports and resources: www.emergentresearch.com

• Blog: www.smallbizlabs.com

• Twitter: @smallbizlabs

• Intuit Future of Small Business reports and resources: www.intuit.com/futureofsmallbusiness


The Entrepreneurial Economy is HereThe Entrepreneurial Economy is Here

• Small businesses:

– Employ over half of America’s private workforce.

– Generate over half of America’s non-farm GDP

– Create 60-80% of America’s net new jobs

– Extremely diverse in size, style and goals


The Long Term Drivers of Economic Decentralization and the Growth of Small Business

The Long Term Drivers of Economic Decentralization and the Growth of Small Business

• The Growth of Market Capitalism

• Deregulation

• Technology

• Globalization

• Information and Market Efficiency

Three Eras of TransformationLeads to Growth of Small Business


Large Small Business

Mid Market

Micro & PersonalAbout 2/3 of Personal

Businesses are Significant Contributors to Family

Income

Micro & PersonalAbout 2/3 of Personal

Businesses are Significant Contributors to Family

Income

Main Street

27 Million U.S. Small BusinessesOnly 17,000 businesses with more than 500 employees

27 Million U.S. Small BusinessesOnly 17,000 businesses with more than 500 employees

AverageRevenues

$1.2M

$6.1M

# of Firms

1.8M

630K

90K

24.5 M

# of Employees

20-99

0-4

Sources: Intuit Main Street Quant Survey 2006, Intuit Segmentation Survey 2008, US Census data 2008 & 2009, US BLS data 2008 & 2009, Emergent Research estimates 2009

$65k

$31M

5-19

100 - 499


The Next Decade

The New Artisan EconomyThe Next Decade

The New Artisan Economy

• Over 40 million U.S. small business by 2017

• Roughly 32 million personal businesses

• Over 13% of Americans self employed

• The new artisans will be knowledge workers, but many will make things

• They will be amplified by technology and highly networked

Source: New Artisan Economy research report (www.intuit.com/futureofsmallbusiness)


2009 Top 10 Small Business Trends2009 Top 10 Small Business Trends

• Economic Trends

– The recession drives small business innovation– Government plays an increasing role in the economy– Global infrastructure and stimulus spending– The number of small businesses will increase in 2009– Small business globalization will temporarily slow

• Demographic Trends

– Baby boomer retirement problems leads them to small business– Gen Y turns to small business

• Technology Trends

– Mobile computing continues strong growth– Cloud computing becomes mainstream for smallbiz– Small business use of online marketing tools expands


The Recession is Dominant Issue for Small Business in 2009 – And Drives Innovation

The Recession is Dominant Issue for Small Business in 2009 – And Drives Innovation

• Small businesses focus on cash flow, cost containment, customer retention and survival

• Re-evaluate, re-design and refine all aspects of their business to create opportunity

• Improvements through incremental and business model innovation common

Economic Trends


Government Plays an Increasing Role in the Economy

Government Plays an Increasing Role in the Economy

• Economic turmoil, corporate malfeasance and regulatory failure lead to greater global government economic oversight

• Long term, global trend towards market capitalism still in place

• Small business awareness of federal, state and local government policies and programs required

Economic Trends


Global Infrastructure and Stimulus SpendGlobal Infrastructure and Stimulus Spend

• Stimulus package will create or save 1.6 million small business jobs

• Global stimulus spending over $1.5 trillion

• Construction, clean tech, IT largest spending areas

Economic Trends

Source: The Stimulus Package: What it Means for Growing Businesses (www.myventurepad.com)


Small Business Numbers Will Increase in 2009

Small Business Numbers Will Increase in 2009

• Job losses will lead to “necessity entrepreneurs”

• Easier and cheaper to start a small or personal business than in prior recessions

• Small business failure rates will increase, but net will be positive

Economic Trends

Source: Warrillow, SBA; employer businesses only.


Small Business Globalization Will Temporarily Slow

Small Business Globalization Will Temporarily Slow

• Recession and currency market turmoil reduce export opportunities

• Small businesses will focus on local markets

• Long term trend towards small business globalization will continue.

Economic Trends


Baby Boomers Will Work Past Retirement AgeBaby Boomers Will Work Past Retirement Age

• Want to work

• Want change & work/life balance

• Skills, Ability, Flexibility

• Recession and stock market losses mean many will have to work.

0

0.2

0.4

0.6

0.8

1

1.2

1.4

Small Business Formation by Age

Avg 45-54 55-64 65+

27%More likelyto start a smallbiz

Sources: Kauffman Foundation, US Census

Demographic Trends


Generation Y Will Turn to Small BusinessGeneration Y Will Turn to Small Business

• Digital natives with excellent end user tech skills

• Don’t trust corporations

• Values oriented

• Limited near term employment opportunities do to recession

0

10

20

30

40

50

60

70

80

Percentage of Teens

Who Want to Work For:

%

Someone

Else

Themselves

Source: Gallup Poll

Demographic Trends


Mobile Computing Continues Strong GrowthMobile Computing Continues Strong Growth

• Internet access devices

• Smartphones

• Ubiquitous WiFi

• Cellular nets

• Broadband

• Search

• Cloud resources

Technology Trends


Cloud Computing Becomes Mainstream for Small Business

Cloud Computing Becomes Mainstream for Small Business

• Lowers capital costs

• Turns fixed costs into variable costs

• Scalable solutions

• Many cloud issues seen as advantages by small businesses:

– Security– Reliability– Control of data

Technology Trends


Small Business Expands Use of Online MarketingSmall Business Expands Use of Online Marketing

• Small business online presence growing

• Growing understanding of online marketing

• Starting to understand social media and search engine optimization

• Clear metrics and ROI

• Lead generation in a recession

Technology Trends

Emergent Research


2009 Top 10 Small Business Trends2009 Top 10 Small Business TrendsMay 29th, 2009May 29th, 2009

Carolyn Ockels & Steve King Emergent Research

2009 top 10 small business trends

Business

growth of small business

small business globalization

small business formation

small business digital

number of small businesses

small business gen y

economic trends social

personal businesses