Top 10 Small Business Trends for 2010

***Update - our Top 10 small Business Trends for 2012 list is now available***

In what has become an annual tradition, below is our top 10 small business trends list for 2010 (click here for our 2009 list, here for 2008). 

The economy continues to be the key issue facing small business.  We expect a country & western song type of recovery in 2010 - we've been down so low, the bottom looks like up.  We anticipate moderate economic growth and stubbornly high unemployment.

Economic Trends 

1.  The Shift to Contingent Workers Turns Employees into Entrepreneurs:  Employers large and small are shifting from full-time employees to part-timers, freelancers, outsourced services, partnership arrangements and other forms of contingent workers.  They are doing this to save money and increase business flexibility.  Despite the economic recovery, 2010 will see the contingent workforce grow as companies continue to limit hiring of full time staff.  Many of these contingent workers will create or work for small businesses.

2.  Personal Businesses on the Rise:  Enabled by the Internet and low-cost information technology, the number of personal businesses (one employee businesses) has grown twice as fast as the overall economy over the last decade and exceeds 22 million.  With the unemployment rate remaining high and traditional employment options limited, 2010 will be another year of strong growth in the number of personal businesses.  The growth in personal businesses will also result in an increase in overall small business formation and numbers in 2010.

3.  Small Business Lending Returns to Pre-Bubble Levels:  The Great Recession was caused in large part by a decade long credit bubble.  The recession ended the bubble and small business borrowing was extremely difficult in 2009.  2010 will see a thawing of credit markets, but the easy credit environment of the last decade will not come back.  Instead, lending standards will return to pre-bubble levels and only highly credit worthy small businesses will be able to borrow.  Because of this, the availability and use of alternative credit sources - merchant advances, micro-lending, community lending, factoring, etc. - will grow as sub-prime small businesses seek funds. 

Social Trends

4.  The New Local Movement:  New localism is a long-term trend whose impact has been accelerated by the recession.  Driven by changing demographics, new technology, rising energy prices and growing concerns about the environment, more Americans are focusing on their families, friends and communities.  Small businesses tap into and benefit from this trend several ways.  Small businesses allow greater community focus for the owner and employees, and they benefit from market opportunities created by locally-oriented customers. 

5.  There is No Place Like Home for Small Business:  Fueled by technology and enabled by low costs, 2010 will see the continued growth of home-based businesses.  According to the SBA half of all small business are home-based. Our research shows that about 6.6 million home-based enterprises provide at least half of their owners' household income, and together employ more than one in 10 private sector workers.  See our Top 10 Hompreneur Trends for 2010 list for more on home-based businesses.

6.  Clean and Green Creating Small Business Opportunities:  Despite the current climategate controversy, the trends towards sustainability, clean technology and green energy continue to gain strength with consumers and businesses.  In many cases the shift to sustainable business practices, products and services is changing how industries operate and creating a wide range of new small business opportunities.

Technology Trends

7.  Social, Mobile and Cloud Computing Converge:  All three of these interrelated technologies have been on our top 10 list for several years.  Mobile and social computing entered the mainstream in 2009, and cloud computing will join them in 2010.  Individually, each of these technologies is having a major impact on small business.  But the increasing convergence of these technologies is amplifying their impact and fundamentally changing how business is done.

8.  Location Technology and Services:  With the near ubiquity of GPS systems in smartphones and cars, consumer and business use of location aware applications will grow dramatically in 2010.  Location information on businesses and consumers will become common and merge with online reviews and ratings.  The use of location-based marketing services will grow as location data makes the shift from offline to online marketing even more powerful and attractive.

9.  Analytical Tools Lead to Data-Driven Decisions:  Sophisticated yet easy-to-use tools are allowing small businesses to move from "gut level" decision making to evidence-based management.  Online marketing and customer relationship management systems in particular allow small businesses to develop data-driven marketing and support programs that even recently were available only to large corporations.

10.  Online Training Brings Professional Education to Small Business:  Low-cost yet highly professional online training courses and programs provide small business with the ability to improve productivity and employee engagement.  Often utilizing digital video and delivered just-in-time, online training provides small business with the ability to adapt and adjust to changing business conditions.  Negatively impacted by the recession, small business use of online training will accelerate in 2010. 

Comments

[Matt]

Great post! I think I found the first point most interesting. I've read over a dozen of these "top 10 small business" articles and I don't think I've seen one that has mentioned that before. It makes sense for business to do, really. eg. cuts costs, increase efficiency, possibly.

[Kate DuBois]

Your list is terrific and a great reminder that even in a slow-growth economy, small business continues to grow, our creative output increases, and if our businesses are to survive, we need to be engaged in all three trend areas you mention: economic, social, and technological.

Another social trend that I think will fascinate you I just learned from a new book I recently previewed, "Built to Sell," by John Warrilow (http://builttosell.com). He says that over half of America’s 23 million business owners hope to exit in the next 10 years!

I was surprised by what I learned about to prepare your small business for retirement regardless of how young you are now. That's another trend to watch.

[Boise Real Estate]

I love thinking outside the box! I hate it when people sit around complaining about how bad things are. Great post and I wish everyone in this country would read it.

[Open Intelligence]

In the 80s rescession, Charles Handy came up with the term “portfolio person” to describe how people would make a living. I have been advocating homeworking and the importance of the local economy (and local currencies) since then, too. As a content analyst, I have been advocating “analytical tools” for (self signifying) “data driven decisions” for even longer. And we are still a small business. But it looks like the opportunity to become a big business might be presenting itself. The data seems to be pointing that way (along with our order book).

We provide a free news intelligence monitor at www.openintelligence.amplify.com.

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[FFcommunicator]

Here's 10 Resolutions for Success in 2010 and Beyond http://www.famefoundry.com/1540/10-resolutions-for-success-in-2010-and-beyond

@FFcommunicator
Fame Foundry

[Darren]

The "New Local Movement" really isn't all that new, but it is a key point! Most small businesses operate within 50 miles of their homes or offices so it makes sense to focus locally.

[Shahjahan Chaudhary]

I believe this decade will see a definite shift from big business to The Era of Small when networked, hyper-organized individuals will seize big opportunities with unbeatable speed. "Small can act like big, and big must act like small" is the sort of thing Tom Peters has been teaching for a long time now. 2010 will see more of this trend becoming mainstream.

[The Franchise King]

Steve,

Great job on this article!

Home IS where the hear is...

The Franchise King®
Joel Libava

[kiramatalishah]

3. Anyone experience anything about the easy google profit kit? I discovered a lot of advertisements around it. I also found a site that is supposedly a review of the program, but the whole thing seems kind of sketchy to me. However, the cost is low so I’m going to go ahead and try it out, unless any of you have experience with this system first hand?

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[Salt Lake City IT Services]

With businesses applying more and more technology there will be a greater need for IT help. A good IT service can help businesses be more productive and keep the headaches away.

[Alora Chistiakoff]

This is a great list -- I especially like the first two, and their implications for entrepreneurship in a data democracy. (Wrote about here: http://www.workingpoint.com/blog/2010/01/07/contingent-small-business-workforce/?utm_source=smallbizlabs&utm_medium=comment&utm_campaign=entev) Exciting stuff. Thanks!

[Penny Stocks]

Your business blog is so excellent and beautiful to read and learn. Thanks

[charlesbrooks]

The best place for freelance projects is freelancing sites. Freelancing sites are the best option for part time home based business and freelance jobs. There are many types of work available at freelancing sites

www.onlineuniversalwork.com

[anthony]

The Information Technology community provides free resources pertinent to anyone in any industry touched by computing technologies. Here you’ll find Information Technology industry news, blogs, feature articles, videos and more. Use these tools to educate yourself and stay current with what’s happening in Information Technology

[Penny Stocks]

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[Jamie]

What are some of the cutting edge, or "bleeding edge" technologies that corporations are working with?
What does it mean to be an "early adopter" in terms of technology trends?
What opportunities and risks come with incorporating new approaches into an organization?

[Bandwidth Management Tools]

Well it starts with tools such as one rack unit that incorporates a hub, a router, and a bandwidth management. Less wires, all localized into one unit, and more productivity using less money to purchase it.

[Jennifer]

Awesome post! This post is a reminder that even in a slow-growth economy, small businesses continue to grow.
Businesses need to start small to understand the basic working, only then can they grow into bigger and better organizations that may some day span the globe.
There are new strategic challenges for the global firm eg: market opportunities migrating to rapidly emerging economies in the East; the long shadow of the financial crisis and the rising prominence of sovereign wealth funds; and the urgent imperative to deal with climate change and to include a larger number of stakeholders in the firm's growth strategies.
The OWP sessions at the IMD address these challenges.

[jessie amelio]

The big difference between the corporate- or capitalistic-leaning sects and those of the recently and somewhat jokingly dubbed “edupunk” sect are in the underlying ideology of mashups, a do-it-yourself mentality, and above all affording learners and educators sufficient flexibility and opportunity to guide and discover their own learning paths. They thrive on open source technology, and the the notions of sharing and reuse.

www.onlineuniversalwork.com