Emergent Research
www.emergentresearch.com
2009 Top 10 Small Business Trends2009 Top 10 Small Business TrendsMay 29th, 2009May 29th, 2009
Carolyn Ockels & Steve King Emergent Research
www.emergentresearch.com
Emergent ResearchEmergent Research
• Our focus is identifying, analyzing and forecasting the trends and forces impacting small business.
– economic trends– social and demographic shifts– impact of technology – changes in industrial structure
• Reports and resources: www.emergentresearch.com
• Blog: www.smallbizlabs.com
• Twitter: @smallbizlabs
• Intuit Future of Small Business reports and resources: www.intuit.com/futureofsmallbusiness
www.emergentresearch.com
The Entrepreneurial Economy is HereThe Entrepreneurial Economy is Here
• Small businesses:
– Employ over half of America’s private workforce.
– Generate over half of America’s non-farm GDP
– Create 60-80% of America’s net new jobs
– Extremely diverse in size, style and goals
www.emergentresearch.com
The Long Term Drivers of Economic Decentralization and the Growth of Small Business
The Long Term Drivers of Economic Decentralization and the Growth of Small Business
• The Growth of Market Capitalism
• Deregulation
• Technology
• Globalization
• Information and Market Efficiency
Three Eras of TransformationLeads to Growth of Small Business
www.emergentresearch.com
Large Small Business
Mid Market
Micro & PersonalAbout 2/3 of Personal
Businesses are Significant Contributors to Family
Income
Micro & PersonalAbout 2/3 of Personal
Businesses are Significant Contributors to Family
Income
Main Street
27 Million U.S. Small BusinessesOnly 17,000 businesses with more than 500 employees
27 Million U.S. Small BusinessesOnly 17,000 businesses with more than 500 employees
AverageRevenues
$1.2M
$6.1M
# of Firms
1.8M
630K
90K
24.5 M
# of Employees
20-99
0-4
Sources: Intuit Main Street Quant Survey 2006, Intuit Segmentation Survey 2008, US Census data 2008 & 2009, US BLS data 2008 & 2009, Emergent Research estimates 2009
$65k
$31M
5-19
100 - 499
www.emergentresearch.com
The Next Decade
The New Artisan EconomyThe Next Decade
The New Artisan Economy
• Over 40 million U.S. small business by 2017
• Roughly 32 million personal businesses
• Over 13% of Americans self employed
• The new artisans will be knowledge workers, but many will make things
• They will be amplified by technology and highly networked
Source: New Artisan Economy research report (www.intuit.com/futureofsmallbusiness)
www.emergentresearch.com
2009 Top 10 Small Business Trends2009 Top 10 Small Business Trends
• Economic Trends
– The recession drives small business innovation– Government plays an increasing role in the economy– Global infrastructure and stimulus spending– The number of small businesses will increase in 2009– Small business globalization will temporarily slow
• Demographic Trends
– Baby boomer retirement problems leads them to small business– Gen Y turns to small business
• Technology Trends
– Mobile computing continues strong growth– Cloud computing becomes mainstream for smallbiz– Small business use of online marketing tools expands
www.emergentresearch.com
The Recession is Dominant Issue for Small Business in 2009 – And Drives Innovation
The Recession is Dominant Issue for Small Business in 2009 – And Drives Innovation
• Small businesses focus on cash flow, cost containment, customer retention and survival
• Re-evaluate, re-design and refine all aspects of their business to create opportunity
• Improvements through incremental and business model innovation common
Economic Trends
www.emergentresearch.com
Government Plays an Increasing Role in the Economy
Government Plays an Increasing Role in the Economy
• Economic turmoil, corporate malfeasance and regulatory failure lead to greater global government economic oversight
• Long term, global trend towards market capitalism still in place
• Small business awareness of federal, state and local government policies and programs required
Economic Trends
www.emergentresearch.com
Global Infrastructure and Stimulus SpendGlobal Infrastructure and Stimulus Spend
• Stimulus package will create or save 1.6 million small business jobs
• Global stimulus spending over $1.5 trillion
• Construction, clean tech, IT largest spending areas
Economic Trends
Source: The Stimulus Package: What it Means for Growing Businesses (www.myventurepad.com)
www.emergentresearch.com
Small Business Numbers Will Increase in 2009
Small Business Numbers Will Increase in 2009
• Job losses will lead to “necessity entrepreneurs”
• Easier and cheaper to start a small or personal business than in prior recessions
• Small business failure rates will increase, but net will be positive
Economic Trends
Source: Warrillow, SBA; employer businesses only.
www.emergentresearch.com
Small Business Globalization Will Temporarily Slow
Small Business Globalization Will Temporarily Slow
• Recession and currency market turmoil reduce export opportunities
• Small businesses will focus on local markets
• Long term trend towards small business globalization will continue.
Economic Trends
www.emergentresearch.com
Baby Boomers Will Work Past Retirement AgeBaby Boomers Will Work Past Retirement Age
• Want to work
• Want change & work/life balance
• Skills, Ability, Flexibility
• Recession and stock market losses mean many will have to work.
0
0.2
0.4
0.6
0.8
1
1.2
1.4
Small Business Formation by Age
Avg 45-54 55-64 65+
27%More likelyto start a smallbiz
Sources: Kauffman Foundation, US Census
Demographic Trends
www.emergentresearch.com
Generation Y Will Turn to Small BusinessGeneration Y Will Turn to Small Business
• Digital natives with excellent end user tech skills
• Don’t trust corporations
• Values oriented
• Limited near term employment opportunities do to recession
0
10
20
30
40
50
60
70
80
Percentage of Teens
Who Want to Work For:
%
Someone
Else
Themselves
Source: Gallup Poll
Demographic Trends
www.emergentresearch.com
Mobile Computing Continues Strong GrowthMobile Computing Continues Strong Growth
• Internet access devices
• Smartphones
• Ubiquitous WiFi
• Cellular nets
• Broadband
• Search
• Cloud resources
Technology Trends
www.emergentresearch.com
Cloud Computing Becomes Mainstream for Small Business
Cloud Computing Becomes Mainstream for Small Business
• Lowers capital costs
• Turns fixed costs into variable costs
• Scalable solutions
• Many cloud issues seen as advantages by small businesses:
– Security– Reliability– Control of data
Technology Trends
www.emergentresearch.com
Small Business Expands Use of Online MarketingSmall Business Expands Use of Online Marketing
• Small business online presence growing
• Growing understanding of online marketing
• Starting to understand social media and search engine optimization
• Clear metrics and ROI
• Lead generation in a recession
Technology Trends
Emergent Research
www.emergentresearch.com
2009 Top 10 Small Business Trends2009 Top 10 Small Business TrendsMay 29th, 2009May 29th, 2009
Carolyn Ockels & Steve King Emergent Research