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Looking Ahead: Issues and Challenges
Half-full or half-empty?
The results of a recent survey show that a majority of U.S. small-business owners see the proverbial glass as “half -full” when it comes to the future success of their companies. Even with the Great Recession behind them, though, smaller firms will continue to face a host of issues and challenges in years ahead, forcing them to adjust their business models.
In fact, some experts suggest the factors most likely to affect firms of 100 employees or less are: emerging business technologies; new healthcare laws and regulations; revised tax codes; greater competition; staffing; and cybersecurity. To help you stay informed and ahead of the game, here’s some information on financial, regulatory and management issues that may impact the small business community over the next decade:
- Implementing new and emerging business technologies. Business today moves at light speed. Modern computers have revolutionized the corporate world, with new software, apps and data storage options springing up daily. For business owners, this means acquiring the skills to operate these new technologies. While community or technical colleges remain great and convenient places for this brand of education, many software manufacturers also provide training in conjunction with their customer support services.
Chief among emerging technologies is “Cloud” computing, which involves storing data on virtual servers hosted by third parties. Cloud computing is particularly small-business friendly because it allows access to a variety of office productivity tools (email, calendar, word processing, databases, invoicing, CRM, intranet, etc.) without an investment in expensive, stand-alone software licenses.
In considering what technologies will help your business thrive, be sure to research your options, confirm the benefits and start small when possible.
- Interpreting and adhering to changing healthcare laws and regulations. Since 2015, companies with 50 or more employees must offer health insurance coverage or risk fines from the federal government. That’s just one provision of the Affordable Care Act (ACA), a federal statute enacted in 2010. In some cases, tax credits are available to companies that provide coverage for their employees. Even so, entrepreneurs who plan to expand staff in the next few years need to understand the full implications of this legislation and any possible changes to it in the near future. The U.S. Small Business Administration (SBA) has resources on their website on ACA.
- Understanding and applying the tax code. Familiarizing yourself with provisions of the tax code as it relates to your small business will help you keep more of what you work so hard for – your money. To this end, the IRS provides a comprehensive Small Business and Self-Employed Tax Center, which answers a multitude of question concerning tax credits, legal deductions and filing of returns. Due to the complexity of the tax laws, however, it’s best to consult your tax attorney or other tax professional for advice pertaining to your small businesses’ specific tax situation.
- Heading off the competition at home and afar. These days, competition in business means not only the shopkeeper down the street, but also the shopkeeper in a whole different corner of the world. With China a formidable economic force, many small companies in the United States are likely to feel the ripple effect of business decisions made by this Eastern powerhouse for years to come. Meanwhile, continue to look for ways at home to differentiate yourself from regional, local and global competitors, while continuing to define your brand.
- Identifying key resources for sustainment and growth. Capital and cash flow – the circulatory system of any business – are two words emblazoned on every entrepreneur’s mind. But how do you ensure you have enough money coursing through your company in a healthy stream? Beyond traditional bank loans and credit lines, your small businesses may also qualify for alternative financing sources, including peer-to-peer lending, private and government grant programs, asset-based financing, and venture capitalists.
- Hiring the right talent. Successful entrepreneurs will tell you it’s the people behind the product or service that make things happen. That’s why it’s so important to hire the right employees – not always an easy job. In fact, in a 2016 survey by Babson College, almost half of small-business owners rated finding skilled workers their top concern. While there is no simple solution to the problem, experts say entrepreneurs will more readily find competent staff by networking, seeking input from recruiters, writing a comprehensive job description, and using clear, targeted questions during the interview process. For industry-specific skills, community colleges and trade schools will likely remain among the prime places to launch a talent search.
- Maintaining cybersecurity. Though hackers have been a problem since the Internet’s emergence, the breadth and sophistication of these attacks have grown exponentially over the last 10 years. IT experts continue to develop protective software to thwart this criminal activity, but it’s not an easy task.
The best way to keep hackers out of your system is to take a few proactive measures. The SBA has developed a training tool to help small business-owners define cybersecurity; implement best practices; decide what data needs protection; identify potential threats; and create a risk management protocol.