A recent Federal Reserve forecast for 2019 proposes that the U.S. Economy will grow 2.5 percent in the coming year and inflation will be checked at 2 percent. Such a prediction only a few years ago would have been thought to be the ranting of an overly optimistic and controversial student of economics, or the position statement for a largely discredited, naïve, want-to-be politician. At the start of this New Year, perhaps the least surprised entity among the business community is small business. Cut from the same cloth of optimism, small businesses in America account for 2 out of every 3 new jobs created. With unemployment at the lowest level in decades (some predict it could set a record low in 2019 of 3.5 percent), it would appear that the optimists are winning the day.
The accepted thought among a majority of business soothsayers is that the coming year is the best time for those optimistic entrepreneurs to engage their plans and open their dream businesses. The reality is that no one can promise success for anyone venturing into business at any time. While 2018 was generally considered a positive tipping point for small to mid-sized businesses, just over half said operations performed better over previous years, and less than half were willing to venture a prediction of continued growth in 2019. Despite all the positive economic indications, there remains just enough room around the edges of everyone’s crystal ball to manifest a degree of doubt about the size of the expected fortunes to come for small business owners.
Most vulnerable are new and emerging businesses that lack the time to establish a sustainable base in which to weather any downturns in market performance. To survive and prosper, small entities will need to be focused on adopting strategies that gravitate towards growth in 2019, regardless of temporary fluctuations in the economy. Experienced entrepreneurs are painfully aware that failure lurks in the economic shadows occupied by those factors that are just beyond their control. A profound and sustained focus on technology, finance, marketing and public policy will be of paramount importance going forward.
“Customers today have more choices than ever, and they have shown they will gravitate toward those who prioritize the delivery of fast, seamless and personalized service. This is true whether they are ordering lunch, getting their car repaired or making a financial transaction. In my industry of financial services, we’ve already seen large legacy companies start to fall behind smaller startups who offer better user experiences,” says Bernardo Martinez, U.S. managing director at Funding Circle.
Another challenge facing all small to mid-sized businesses is the lack of qualified and motivated employees. With a record 39 percent of small business owners reporting unfilled job openings, finding qualified workers is the single most challenge facing them in 2019. “Optimism among small business owners continues to push record highs, but they need workers to generate more sales, provide services, and complete projects,” said NFIB President and CEO Juanita D. Duggan. “Two of every three of these new jobs are historically created by the small business half of the economy, so it will be Main Street that will continue to drive economic growth.”
The year 2018 turned out to be a boom-time for non-bank business lending as 80 percent of traditional bank small business loan applications were rejected. The trend in non-bank financing appears to be ripe for continued growth in 2019. Kabbage, an Atlanta-based online lending company established in 2008, says small businesses now access more than $10 million every day via its platform. Despite all the preponderance of predictions, finding success in business is, in itself, a risky business; one where failure or success awaits just around the corner of opportunity and for those optimistic enough to brave the dangers of the journey.