TRANSFORMATION: March 2014 – It’s a brave new world
The future belongs to those who can maintain the pace of change
Never before have there been as many opportunities for entrepreneurs as there are today, but companies must be agile enough to meet the changing demands of technology, consumers and employees.
Predictions about the future of business are as varied as the prognosticators, but some themes emerge from nearly anyone willing to gaze into the crystal ball. One thing is certain: changes are happening faster than ever before, affecting more companies and consumers than ever before and opening the gates of opportunity for entrepreneurs wider than ever before.
Buying and selling from anywhere, any time
While we are still at the beginning of the mobile application phenomenon, technological changes for small business are appearing daily. In 2013, more than 18 percent of Cyber Monday sales were made online. More than 40 percent of sales were made from a mobile platform on Black Friday. Mobile technologies are dramatically changing the way consumers shop, the way retailers accept payments and the way companies maintain their relationships with their customers. With the attachment of a small device to a smart phone or tablet, a store owner can take payment anywhere.
Mobile wallets are internet-based accounts that are stored on mobile devices. Holders of mobile wallets use them to purchase products and services, pay their bills, receive notifications of deals and discounts and manage their financial information. Use of mobile wallets is expected to skyrocket in the U.S. in 2014; mobile wallet apps are already available from Google, Apple and Square, among others.
In the next year, we’ll see more creative and low-cost mobile-commerce platforms appearing weekly, and they will be faster, easier and more secure with each iteration. Seamless browsing, saving and shopping across platforms will be crucial for any business that wants to grow in the next two to three years.
Some experts estimate that mobile device users spend more than 15 hours per week using them. Last year, experts predicted that mobile use would surpass desktop use by 2015, but it’s already happened. Many major websites report that they have already gone beyond 50 percent in mobile traffic. Those who are just starting to get ready for the mobile environment are already late to the party.
Online is where a company needs to be
Everyone on the planet will eventually be online. We will be able to instantly connect with anyone regardless of location or technology. Even smart phones will be considered prehistoric. With the push of a button on a watch, ring or bracelet, we’ll be in touch. As a result, nothing we do will remain private, and management of our “personal brand” will become a personal imperative. Reputations and deals will be built on what others find online about a company, its ownership or employees. Everyone is now a reviewer.
The new fascination with monitoring everything from home room temperature to calories burned using smart devices will continue to captivate consumers. Entrepreneurs have an exciting opportunity to develop these applications that can let users know everything from when the veggies in the crisper have turned to when a child has moved from one room to the next at home.
Because buying habits are becoming more transparent, businesses that could not afford to gather or analyze data in the past can do so economically and easily now, allowing them to move beyond “hunches” about how to grow their business and into the realm of documented factual data. Whether it’s internal data or purchased data, at no other time has so much readily accessed information been available for business owners.
Sourcing services are also on the rise. With more small businesses entering the global marketplace, providers are quickly developing tools to help those companies submit requests and find suppliers within 24 to 48 hours. One of the sourcing leaders — Alibaba.com — went live with AliSourcePro and attracted 50,000 submissions in only three days.
The new generation of workers
In the future, two of every five workers in the U.S. will make a job — not take a job. There are 28 million small businesses in the U.S.; 22 million of those have one employee — the owner. Non-employer companies are the fastest growing sector of the small business economy. Many of those one-person companies will be started by students while still in school or shortly after graduation. We saw a 5 percent increase in independent workers in 2013 compared to 2012, up to 17.7 million, generating nearly $1.2 trillion in total income. There will be more than 24 million independent contractors by 2018.
Due to the rising cost of education and more limited job prospects, more young people may arrive in HR departments seeking to learn on the job through apprenticeships and in-house training programs. Employers will have to spend more time and money educating their own workforce, and young, talented workers will seek out companies willing to make that investment.
While many companies still want the experience that older workers bring to them, young employees offer energy, time, lower costs, optimism and a higher tolerance for risk. If something goes awry, youthful workers can bounce back more quickly and are more accustomed to movement in the workplace than their fathers or grandfathers were.
Today’s youngest workers will stay in a position no more than three years. Employers need to be like coaches who only have a talented player for a few seasons. Push him hard to excel and prepare him for the next league of play.
Young workers are looking for something more than merely a paycheck. They want to do work that matters. More traditional management styles are being replaced with collaboration, more fluid workplaces and flatter organizational structures. Projects will be driven by multidisciplinary teams that share loyalty to team members as well as to the owner.
Employers should consider every employee a possible leader. But employers won’t have these youthful workers for long. Today’s youngest workers will stay in a position no more than three years. Employers need to be like coaches who only have a talented player for a few seasons. Push him hard to excel and prepare him for the next league of play.
Human resource professionals will become more important as businesses work to structure benefit packages that reflect the demands of the new workforce, support employee engagement and improve the firm’s bottom line. Income inequality and the debates over minimum wage will continue.
The term “portfolio career” is appearing in the workforce as well. Because the more traditional career path is becoming a thing of the past, workers are creating a new pathway by either moving back and forth between self-employment and traditional employment or creating a career from a variety of industries and funding sources, including part-time jobs and freelancing. Workers may appear in the HR department with a different-looking resume than they did even 10 years ago.
More service, less patience
As the online marketplace becomes more competitive, speed of delivery will become a deal breaker. One-day delivery options will become more prevalent and can be a real advantage for local businesses that can manage the logistics internally or with an out-sourced provider.
Accountability to both consumers and workers is more important than ever before. Transparency is key and creates trust internally and externally. Given a choice between two companies offering the same product or service, consumers will opt for the business that is a solid steward of its resources, the environment, social causes and its local community. It’s time to market “green,” and stress how a company not only protects the environment but enriches it.
Personalized customer service is imperative. Even online giants such as Amazon now offer customized product choices based on a buying history. Customers are greeted personally when they return to the site. How can small business respond? Invest in an online infrastructure that facilitates customer relationship management and includes push messaging to customers based on their preferences. In addition, allow customers to check their shipments easily, or better yet, invest in technology that will send updated information to them regarding where their purchases are in the shipment chain.
Responsiveness is the current competitive advantage. Consumers have limited patience and expect to hear back from companies almost immediately. Whether they call, email, Facebook or tweet, a company must be staffed adequately to respond instantaneously. Patience is thin, choices abound, and consumers will move on to the next source for what they want if they do not receive a response. Companies should ensure their website provides what the customer needs and ensure that employees are empowered to make decisions to guarantee customer satisfaction.
Personalized follow up after a sale is one of the best ways to retain a customer and will be even more important in the future. Was the service or product satisfactory? Does the customer need any more information to help make future purchases?
Online customer engagement will increase and will be especially powerful for local marketing because cost is no longer prohibitive and potential employees are coming out of school with the necessary skills to implement the new strategy. But if owners decide not to bring that skill in-house, look for an increase in the number of small businesses willing to manage social and cyber marketing for larger firms.
No substitute for the personal touch
In spite of all of the technology that enables us to conduct business from multiple points around the globe, there is a resurgence of “in-person” meetings and personal touches that were the hallmarks of business for decades. The importance of personal relationships is coming back. 81 percent of businessmen and women still believe that face-to-face meetings are necessary to build trust and “close the deal.” And 47 percent of those businessmen and women felt they have lost an important contact or client because they didn’t have enough face to face time.
Another report indicated that 74 percent of business professionals believe that eye contact is the top non-verbal indicator of the outcome of a conversation, and online meetings don’t provide that feedback. In person meetings will not go away until we have a way to make our video presence as compelling as our actual presence. For simple information sharing, calls and online meetings are sufficient; for building trust, bonding teams, making a big sale or influencing, we still need to look one another in the eye. We will always need to be connected to each other.
And finally … transfer of wealth
On a larger stage, the anticipated transfer of wealth (TOW) and the impact that phenomenon will have not only on business, but also on communities, states and the nation, will be a major factor in economic development.
TOW simply means passing assets from one generation to the next. Following the Great Depression and World War II, the U.S. entered a golden age of business growth and personal prosperity. As a result, Americans have created, invested and multiplied unprecedented private wealth. According to the Center for Rural Entrepreneurship in Lincoln, NE, over the next 50 years, this capital, which is conservatively estimated to be about $75 trillion, will change hands. In Missouri, from 2010 to 2060, more than $1.5 trillion will transfer from one generation to the next through 4.2 million estates. From 2010 to 2020, $135 billion will pass to heirs. The study asks the question, “What if some of this wealth was left to the communities of Missouri to provide resources that can help strengthen those communities’ economy or create opportunities to those living in them?”
What does this mean for the general economy? To the extent wealth is transferred and invested in communities to support development strategies that lead to opportunity and prosperity and the well-being of community members, the potential from TOW is enormous. To the extent that wealth is invested in new companies that will create jobs, TOW has the potential to change lives.
Communities with more local businesses enjoy higher income levels. Entrepreneurs create more economic opportunity, use local resources, take risks, turn ideas into businesses and reinvest profits into the city and region. According to the Federal Reserve, national data indicates that, on average, self-employed individuals tend to have greater wealth ($1.7 million) than those who work for someone else ($298,800). Therefore, TOW and future economic development efforts in support of entrepreneurship will help local economies diversify, increase local trade and increase income levels, which, in turn, will enhance TOW in the future.
Download the March 2014 issue of TRANSFORMATION (PDF), formatted for printing.TRANSFORMATION is published by the Missouri Small Business & Technology Development Centers, with assistance from the U.S. Small Business Administration, University of Missouri Extension, Missouri Southern State University and the Joplin Area Chamber of Commerce. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA. Questions and comments may be directed to Mary Paulsell, Director of Communications, MO SBTDC, at 573-882-1353 or email@example.com.
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