Over the past 8 years we've published an annual top 10 small business trends list (click here to see last year's list and a link to prior years).
This year we decided to shake things up a bit.
Instead of our usual 10 trends, we're covering 3 broad trend areas. And in addition to trends you should pay attention to, we've add a few technology trends that are getting a lot of hype that we think you can ignore in 2016.
We're forecasting moderate U.S. GDP growth in the 2.5% to 3% range in 2016. We expect interest rates will move up slightly due to Federal Reserve rates hikes, but remain low by historical standards.
We also expect commodity prices will remain low in 2016. Oil, of course, fell to below $40 per barrel in 2015, and as we pointed out in our 2015 trends this had both positive and negative effects.
But oil wasn't the only commodity seeing price drops. The collapse of China's growth and a weak European Union economy led to a steep declines in most commodities prices in 2015, with the Bloomberg commodities index falling 26%. We see nothing in 2016 that will lead to a turn around for commodities.
While the net economic effects of declining commodity are positive, many sectors and businesses are hurt by these declines. Small businesses need to evaluate the impact of lower commodity prices to see if they and/or their customers are winners or losers.
Technology Trends You Should Pay Attention To in 2016
We been saying for years the growth and convergence of mobile computing, cloud computing and digital data and analytics is fundamentally changing business. Individually each of these technology trends has been impacting small businesses for years. And while each is important and powerful on its own, the growing convergence of these technologies is amplifying their impact and fundamentally changing how business is done.
They’re also leading to new forms of technology-based competition as more small firms use capabilities developed through the convergence of these technologies to create new efficiencies, tap into new markets and develop new revenue streams and business models. Because of this, most small businesses should be aware of and at least evaluating - if not already using - mobile, cloud and analytics products and systems.
Three tech areas we see as particularly important in 2016 are:
1. Mobile payments and mobile marketing start to enter the mainstream for the small business sector. With about 2/3rds of American adults owning a smartphone of some kind (up from just 35% in 2011), mobile devices have become the computing device of choice for many consumers.
2. Cybersecurity, another one of our 2015 trends, will also continue to be a growing issue for small businesses. Small businesses will need to take cyber security and data privacy seriously or they run the risk of alienating customers and/or experiencing a damaging cyber attack.
3. Customer relationship management (CRM) systems will continue to grow in importance as more small businesses realize the value of collecting and analyzing customer information. We continue to be amazed by how few companies use CRM systems.
Hyped Technology Trends You Can Ignore in 2016
1. Virtual reality (VR) is on most 2016 technology trends lists and someday it will be mainstream. But in 2016 virtual reality will mostly be used in gaming systems and a few very specialized applications in industrial setting and healthcare. Unless you are in one of the specialty areas (and if you are, you know it), VR will have little or no impact on your business in 2016.
2. Blockchain may be a game changer in a few years, but it will not impact small businesses at all in 2016. It is worth knowing about, which is we wrote an article on it earlier this year.
3. Driverless cars are still at least 3 to 5 years away - and probably longer. There are some driverless truck applications hitting the market, but only in off-road settings.
2016 is a Presidential Election Year
While homeland security and foreign policy are currently dominating the political debates, economic issues will get a lot of attention over the next year. We think the following issues in particular will be highlighted:
1. The minimum wage is already being debated and we expect more cities and states to increase their minimum wage in 2016.
2. Benefits for freelancers and part-time workers. As with the minimum wage this is a topic already being widely discussed. While rules changes in this area on a national level are highly unlikely, we expect some cities and states to adjust their rules to broaden benefits for workers.
Have a happy and prosperous 2016.