Last week, I began my annual look at the top ten trends shaping small business. We wrap it up this week with a look at the Top 5.
No. 5: The China syndrome: It has often been said that the 20th Century was the American Century and the 21st looks to be the Chinese Century. If the past eight years are any indication, that may indeed prove to be true. But whether it is or not, there is no doubt that what is going on half-way around the globe is having, and will continue to have, a profound effect on you and your small business.
Growing at a rate of about 10% per year over the past quarter-century, with a population well over 1 billion and about 20% of the world's population, China's capitalist revoltion touches everything:• High gasoline prices negatively affecting your business? Blame China. The country's thirst for oil to fuel its economic expansion means you should not expect to see gas much below $3 a gallon again.• Worried about global warming? China is no small reason. "China's pollution problem, like the speed and scale of its rise as an economic power, has shattered all precedents" — NY Times, Aug. 25, 2007.• Concerned that your best customers may outsource what you do to a cheaper source? Bingo! China. According to the Asia Times last year, "After becoming the world's workshop for mostly labor-intensive products, China has unveiled a plan to… [challenge India and] create 1,000 large-scale international service-outsourcing enterprises."
The China Factor is something we all have to learn to deal with.
No. 4: It's the economy, stupid, part deux: 2008 looks to be a year dominated by the ripple effects of the sub-prime mortgage crisis: A sluggish economy and probably a recession. For the small business, the effects are substantial:• Falling housing prices, rising interest rates, and increased mortgage defaults means it will be significantly more difficult for small businesses to tap home equity to fuel start-ups, growth, or bailouts.• This credit squeeze also means getting a regular business loan will be tougher.• And the overall belt-tightening means doing business all around will be more of a challenge.
The good news is because this is an election year, we may see Washington try to prop up the economy and lessen the effects of these forces.
No. 3: Green is the new black: Whether it was Al Gore winning an Oscar and the Nobel Peace Prize or the melting of the polar ice caps, there is no doubt that climate change is a trend not to be ignored. That it holds opportunities for small business is not incidental, either.
According to Time magazine, "Green investment by American venture-capital firms reached $2.6 billion in the first three quarters of 2007, the highest level ever recorded and nearly 50% more than the total for the whole of 2006."
So, whether you are looking for a hot sector for a start-up, want to do right by the planet, or just want to make employees and customers happy, going green is smart business.
No. 2: Working smarter, not harder: Coming in at No. 2 on this list again this year is the changing way we work. Increased computer mobility equals increased business mobility.
This also means flex-time, job-sharing, outsourcing, working from home, working on the road, virtual offices, virtual companies – the options seem to grow with every innovation. IBM now has 73,000 employees in India – up 40% from last year.
In his interesting book, The 4 Hour Work Week, entrepreneur and author Timothy Ferris takes this phenomenon to a new level, outsourcing many of his mundane tasks to virtual assistants.
And the No. 1 small business trend for 2008 is …
Networking 2.0: Networking used to be that thing you had to do: Trudging off to the local business mixer to exchange business cards and chit-chat with people you didn't know but whom you hoped needed your services anyway.
Welcome to the new world.
Networking 2.0 is 180 degrees, 100% different. Networking in this new wired world means locating compadres online via a vast network of shared colleagues using sites like LinkedIn, or getting the word out using Facebook, MySpace, or YouTube. Networking today means harnessing the power of the Net to expand your profile exponentially.
That's this year's list. Like it? Disagree? Shoot me an email at sstrauss@MrAllBiz.com.
Ask an Expert appears Mondays. You can e-mail Steve Strauss at: firstname.lastname@example.org.And you can click here to see previous columns. Steven D. Strauss is a lawyer, author and speaker who specializes in small business and entrepreneurship. His latest book is The Small Business Bible. You can sign up for his free newsletter, "Small Business Success Secrets!" at his website —www.mrallbiz.com.