What lies ahead for small business owners and entrepreneurs? Many I’ve talked to feel like they are living in a Dickens novel. It’s the best of times: The economy is going strong, driven, says Sharon Miller, managing director, head of small business for Bank of America, by consumer spending. She says, “according to Bank of America data, consumer spending is up 5.5% on $3 trillion worth of transactions, which will help drive momentum into 2020.”

It’s the worst of times: Many small businesses are struggling with finding qualified employees to fill jobs, are baffled by the rapidly changing world of digital marketing and are facing numerous other challenges.

To get some answers I turned to business leaders, entrepreneurs and thought leaders to get their insights and perspectives on what 2020 (and the new decade) has in store for small businesses. Of course, there are no guarantees. But hopefully, as my friends at Fundbox say, these “trends bear a history and trajectory that demonstrate their value in guiding your company’s efforts—and ones you can “depend on to help gain a competitive advantage in 2020.”

SMB General Outlook/ What’s Ahead for SMBs in 2020? 

Jon Fasoli, Vice President & Small Business Segment Leader, Intuit

Worldwide there are 800 million self-employed professionals and small businesses, which make up 98% of all businesses and employ 60% of the global workforce. Yet the odds of succeeding are stacked against them. Half of these self-starters and small businesses fail in the first five years, two out of three in the first ten years. Additionally, 59% of private sector economists expect a recession by 2020 and 71% of small businesses feel there will be an economic recession in the next two years.

In spite of this, small businesses around the world are maintaining a positive outlook. According to a recent study by Intuit QuickBooks and Wakefield Research, although SMBs are concerned about the economy, they feel confident in their businesses: 48% of small businesses think their revenues will increase in the next 12 months, anticipating an opportunity for more hiring and more work.

Meredith Schmidt, EVP and GM, Salesforce Essentials

Small business owners and leaders are feeling positive about the future as we head into 2020. Confidence is up, and they expect revenues to rise too (according to a WSJ/Vistage survey of small business CEOs). That sense of optimism and certainty is going to propel small businesses to new heights because they are comfortable taking risks, hiring more, and expanding their goals.

Charley Moore, CEO, Rocket Lawyer

On impeachment: Your business should be able to flourish no matter who the president is. And I think that’s especially true for small businesses. On the other hand, who’s in charge does matter, so you should really understand in your business what policies are opportunities and threats for your business. If you’re a business that relies on immigration, like much of the tech sector does, the tightening of H1 work visas for skilled tech workers has been a real challenge for Silicon Valley companies. Certainly, those who are politicians and government officials that support lenient immigration policies would make sense to companies who depend on work visas for skilled labor. With all of these various policies, it’s important for small businesses to understand what policies are opportunities and what are threats to their businesses. From a business standpoint, owners should plan and participate accordingly.

The Economy

Sharon Miller, Managing Director, Head of Small Business, Bank of America

On tariffs: Miller notes the Fall 2019 Small Business Owner Snapshot from Bank of America showed many small business owners were affected about tariffs. Going into 2020, the tariff situation is “uncertain” and that is concerning to small business owners. Miller says, “The concern about tariffs is up three points from the Spring 2019 Snapshot and nine points from Fall 2018.” The increased tariffs have led to a rise in the cost of goods, which “55% of the business owners are passing along to their customers.”

Charley Moore, CEO, Rocket Lawyer

On a potential recession: No one knows when a recession will happen, everyone knows that it will. You should always be ready for a recession, especially now that we’re in late stages of an economic expansion. I think a business should aspire to have durability and manage prudently. There’s no better time to be in business than a time where all of your competitors are struggling, and you’ve got resources. Business owners should want to be the one hiring when everyone else is firing, and a great way to do that is to be aggressive and prudent at the same time. This can be done by planning, doing your work now by taking advantage of this great economy, and ultimately being ready for when the weather changes.

Cybersecurity

Sydney Ivey, general manager of small business, Bank of America Merchant Services

What scams should small businesses look out for in 2020? Data security and cybersecurity experts at Bank of America Merchant Services recommend that merchants be more vigilant against phishing attempts and ransomware attacks in the coming year. According to our research, data compromises can be traced back to a credential compromise where the client was phished. It also has been found that most small business owners and operators do not deploy multifactor authentication. One of the most important things small business owners and operators can do is to ensure they—and their employees—are aware of the ways to protect against phishing attempts. Some important tips to remember are never sharing personal information for any unsolicited email or text or clicking on any links provided in emails if the sender cannot be authenticated.

Do you expect more cybercrime vs small businesses in 2020? Our data security and cybersecurity experts expect to see more attacks on small businesses—especially those that have not deployed any secure technology such as EMV capable terminals, point-to-point encryption (P2PE) along with tokenization. But it’s not just small businesses with a brick-and-mortar location that need to take precautions: small businesses that have an e-commerce site will continue to be targeted as well.

To keep their own and their customers’ data secure both online and in-store, small business owners and operators must ensure they are deploying multi-layer security protections such as CAPTCHA, fraud detection software and enhanced ASV. While keeping data secure is important, it’s also about keeping customers coming back. Based on our 2019 Small Business Payments Spotlight, the number of consumers who will never return to a small business that has had a data breach reached close to 30% in 2019. That’s up from almost 20% in 2017. Small business owners can work with their merchant services provider to help guarantee their payment systems are secure.

Growth

Dan Biewener, Sr. Content Strategist, Fundbox

Going Fast is Better, and Inevitable: Speed has always been important for business, but 2020 will make it imperative. Digital transformation has already swept through large enterprises. Slow movers in adopting such technologies as AI, cloud computing, and digital marketing have failed to remain competitive—or even failed completely.

Although small businesses can’t be expected to match the pace of large organizations in making a digital shift, they can still take immediate advantage of such capabilities through third-party applications and service providers. For example:

• Real-time social media monitoring enables continuous tracking of multiple streams of social media data. A recent survey said that 41% of people would use their social networks to share a bad customer service experience—and about half of consumers would boycott a brand if they received a slow or poor response to a complaint on social.
• Credit at the moment of need is another valuable service now available to small businesses.
• Banks and other traditional lenders can take more than a month to approve a small business for a loan, plus another 3 months on average to actually get funding. Online lenders, like Fundbox, can use AI-enabled underwriting technology provide approvals for small business lines of credit up to $100,000 in just hours, not weeks, with funds available in days, not months.
• Immediate payment of receipts and the ability to offer longer net terms (up to 180 days) for your B2B customers will also become more popular in 2020. By eliminating the delays caused by paper checks and extended terms, fintech companies like Fundbox can reduce the cash flow disruptions and foster your business’s growth.

Robotic Process Automation (RPA) applications or services also promise to become more prevalent in 2020, even for small businesses. By automating many repetitive, routine, back-office tasks, RPA can help free up employees time and enable small businesses to focus on more strategic functions or valuable support for their customers.

Nellie. R Akalp, Chief Executive Officer, CorpNet 

Flatter organizations and more seamless technology: A consequence of those faster decisions is the need for less management. Organizations need to be flatter in order to process information faster unless they want to risk nimble competitors seizing business opportunities.

Raju Vegesna, Chief Evangelist, Zoho

Some of the biggest changes we expect to affect SMBs in the next few years are around CRM and AI. For CRM, Zoho believes that personalization without violating privacy will be a big factor since in order to offer really personalized customer experiences, businesses need to know a lot about their customers. Often, this involves collecting and using customer information across various channels and touch-points, a lot of which might be sensitive in nature. There’s no doubt that personalization will be crucial for success in 2020 but pulling it off without intruding into customers’ privacy will be an important challenge.

Rich Rao, Vice President, Small Business at Facebook
Automation will grow in 2020: Small business owners are always looking for new ways to spend less time running the business so they can spend more time on product development and customer service. Whether for accounting, operations or advertising, automation will increasingly help business owners and their employees focus on the more rewarding parts of the job.

Millennials/Gen Z

Dan Biewener, Sr. Content Strategist, Fundbox

Millennials and Gen Z Will Drive Growth: Millennials recently pulled ahead of boomers as the most populous generation in the U.S., and they themselves are about to be surpassed by Gen Z. In fact, in 2020, more than a quarter of the U.S. population (and 41% of the global population) will be age 24 or younger.

Whether your business sells to younger generations or not, this shift will affect your marketplace and must inform your marketing. Millennials are now the most educated, egalitarian, and racially-diverse population in U.S. history. Gen Z consumers have also entered the workforce, bringing $44 billion in buying power, or nearly $200 billion considering their influence on household buying decisions. With 2020 ushering in this new era of predominantly younger consumers, businesses should consider these current trends when developing their marketing plans:

• Gen Z consumers are more likely to shop in brick-and-mortar stores than online, especially compared with millennials. This behavior may be driven as much by their desire for real-world social interaction as it is by their limited access to credit cards.
• Reviews matter more than ever. Previous customer reviews of your product now hold as much sway as its features and price, influencing 97% of people considering a purchase. This is true especially for younger, internet-savvy shoppers who even check reviews via mobile when shopping in a physical store. A Fan & Fuel study found that “92% of consumers hesitate to make a purchase if there are no customer reviews.”
• Shorter content is better—15 seconds or less. StatisticBrain research says that the attention span of Gen Z viewers has shrunk eight seconds. This is not from lack of concentration but from the need to quickly sort through and assess the enormous information overload they receive online.

Byte

Sharon Miller, Managing Director, Head of Small Business, Bank of America

Millennials are more tech savvy and can leverage technology in ways other generations haven’t thought of.

Michal Borkowski, co-founder and CEO of Sales, Brainly

Gen Z is obsessed with creating content. They will continue to do this, and rally around brands and causes that they see fit. This is an opportunity for brands to leverage loyalty.

Mobile

Dan Biewener, Sr. Content Strategist, Fundbox

Business Must Get Moving on Mobile: Regardless of your line of business, a mobile strategy is now critical to your success—57% of shoppers used a mobile retail app to look for more information about a product or a service in 2019, according to Statista. This trend will be even more pivotal for B2B sellers. As Forbes reports, “Worldwide B2B e-commerce will reach $6.7 trillion by 2020, and the majority of these transactions will happen on mobile.”

A mobile strategy starts with your company’s website. Most users now access search engines through a mobile device. That’s why Google switched to mobile first indexing in 2019, so having a mobile-friendly version of your website is essential to maintaining a page-one presence in search results. McKinsey & Company warns that 61% of users won’t return to a mobile site they had trouble accessing, and 40% will then visit a competitor’s site.

Beyond gaining better visibility on search engines, mobile-friendliness provides other capabilities that drive business.

• Push notifications sent through a mobile app can help sellers engage buyers and re-engage existing customers through selective offers triggered by their user data.
• GPS-enabled mobile apps can provide customers of multi-location sellers with convenient directions to nearby pickup or retail locations.
• Quicker conversions, since Forbes reports that 70% of mobile searches result in an action within an hour of the search.
• Mobile marketing, including in-store offers and data-driven recommendations, can influence shoppers’ purchasing decisions and boost sales by 32%, says Invespcro.

Mobile payments (in-store or online) have gained the trust of consumers and will continue to climb as a preference for conducting transactions in 2020.

Sydney Ivey, general manager of small business, Bank of America Merchant Services

How has adoption of mobile payments been? Will that pick up in 2020? The payments landscape is changing faster than ever. Merchants need to be prepared to accept the forms of payment that are most relevant to their consumers. According to our 2019 Small Business Payments Spotlight, digital wallets and third-party payment services both doubled in usage within two years. Increased convenience and security are attracting more consumers than just the typical early adopters when in-store shopping.

When it comes to online shopping, third-party payment methods like PayPal® are gaining even more popularity, with usage nearly tripling in the last two years. Our research found that 17% of consumers said they wouldn’t make a purchase if they couldn’t pay with their preferred method of payment. To meet their customers’ payments preferences, small businesses should assess their own payment options to make sure they’re responding to consumer demand.

Who are biggest adopters of mobile payments on the business side & consumer—younger consumers? According to our findings in our 2019 Small Business Payments Spotlight, 44% of consumers younger than 30 use their mobile devices while shopping more often today than five years ago. This shift means small businesses need to actively manage their online presence from creating their own website to monitoring review sites, and it appears small businesses are following consumer trends. Additionally, the Spotlight found that 70% of small businesses engage in e-commerce through a website, app or third-party marketplace. In order to stay competitive, its important small businesses pay attention to their customer experience both online and in-store and ensure things like shipping costs meet customer expectations.

Byte

Michal Borkowski, co-founder and CEO of Sales, Brainly

Mobile will drive the conversation when marketing to Gen Z: Gen Z consumes content on mobile more than any other generation. Brands need to be on mobile with them in order to effectively target Gen Z

Money

David Simon, SVP and Global Head of Small Business and Medium Enterprises (SME) Business, Visa
Contactless payments are the future of the customer checkout experience. More than ever before, consumers are choosing a tap-to-pay transaction experience due to its increased simplicity, speed, convenience and security. In 2020, we will see a seismic shift in the ways small business owners adapt to rapidly changing technologies helping them pay, get paid, disperse funds and increase their advocacy efforts. One example of this can be seen through small business owners’ increased acceptance of and reliance on contactless payments technology. We predict a significant increase in tap-to-pay usage in 2020 by small business owners and their employees alike as more merchants globally lean on this technology as their preferred payments platform. Reducing the handling of cash through the tap-to-pay experience ensures quicker transaction times, shorter lines and a lesser likelihood of shopping cart abandonment.

Jon Fasoli, Vice President & Small Business Segment Leader, Intuit

What inhibits growth? Is it money? Lack of other resources? The primary challenge that inhibits small business growth is cash flow. Every day, self-employed and small businesses struggle to manage the movement of money in and out of their business. QuickBooks and Wakefield research indicates that 80% of small business owners feel stressed because of their company’s cash flow. And 33% say they are not fully confident they understand all the details of their business’ financial health. When driven by a cash crunch, a third of businesses have made poor decisions that hurt their long-term potential, including delaying payroll or a loan payment, and 25% have missed a revenue growth opportunity. Many try to feel their way through managing their books with mental math or a spreadsheet that they struggle to keep updated, which leads to stress and suboptimal decisions.

Every small business owner should try their best to understand the big picture if they want their business to grow and succeed. Talk with an accountant or use the new QuickBooks Cash Flow Planner available in early 2020. Working with an accounting professional help small businesses gain insights into their finances, better manage their cash flow, and make informed business growth decisions.

Byte

Andre Swanston, CEO and Founder of Tru Optik

M&A 2.0: Data and Identity: As 2019 saw the most M&A activity by strategics with content acquisitions, 2020 will see a bigger uptick with data and identity solutions being acquired to leverage and monetize the investment companies already made the year prior.

Technology

Sandeep Harpalani, VP of Product Line Management for Connected Home Products, NETGEAR

What exactly is WiFi 6? The latest technology which is now fully here and already supported on the iPhone 11 and Samsung Galaxy S10. Intel-based WiFi laptops are also now being introduced with WiFi 6. This game-changing technology allows more devices to connect and stream simultaneously, without impacting speed or reliability, by scheduling up to 12 streams at once and efficiently packing and scheduling data.

Working with high-speed Gigabit Ethernet wireless like 5G, WiFi 6 caries four times the capacity for devices than its previous version. This vastly increased capacity ushers in faster speeds and enables users to stream to their devices with limited interruptions. More than ever before, it’s easier to maintain the fastest, most reliable connection thanks to WiFi 6 devices like our Nighthawk and Orbi product lines.

Prediction: WiFi 6 will support businesses, both large and small: There is no denying that WiFi 6 will give businesses of all sizes a competitive edge. From the ability to process more data to supporting a modern-day employee who wants the freedom to work anywhere at any time with any device, WiFi 6 opens the doors to an entirely new digital experience for today’s workforce.

From a price perspective, WiFi 6 will give businesses the same if not better value than 5G in its ability to provide more efficient power use and a more seamless data transfer connection. And, if you look at it from the lens of an IT or security staff, the technology was developed to be an extension of a secure corporate LAN, which ultimately limits the need for a staff to go through the route of a VPN to access important information stored in a company-wide intranet. Bottom line, the technology is here to make our businesses run smoother and more secure.

Prediction: WiFi 6 will vastly improve the experience of small business owners and their customers: Today, a key component in providing a great customer experience and building rapport with consumers is supplying strong and reliable WiFi access. WiFi is a key requirement that drives business process and activities and is part of many overarching business-critical operations. WiFi 6 will help SMBs solve real life problems that businesses face to handle larger number of devices efficiently and securely with better throughput and less interference in an office environment.

In fact, according to a 2016 survey by IGR, 62% of local business customers spend more time in store if WiFi is available. With consumers increasingly seeking durable WiFi capabilities within small businesses, it behooves businesses to ensure their WiFi systems are reliable and performing well, with little to no interruption or spotty network connections. While WiFi is only one part of providing a great customer experience, it may be one fundamental reason why customers return for repeated visits.

SMBs will turn to WiFi 6 for increased network capacity, which means more productivity  and likely fewer access points needed to cover an entire small business, resulting in less investment. Better traffic scheduling and basic service set coloring = less interference within the office environment.

Madhu Therani, CTO and Head of AI at Near

Personalized Consumer Experiences: 2020 will see personalization of consumer experiences reach a new level. Both online and offline consumer touch points will utilize various first party and third-party enriched and privacy-safe data sets on multiple dimensions including spatial, temporal and behavioral cues to create compelling physical and virtual experiences.

Data-as-a-Service Goes Mainstream: We expect various data vendors handling different types of consumers (people), places (location) and other entity data to launch reliable Data-as-a-service offerings. These offerings may drive adoption by various app economy publishers and retailers to enrich their first party data sets to drive better consumer acquisition and retention, better product and content offerings, and better measurement for various customer-centric projects.

Continuous Intelligence: Consumer facing businesses will continue to generate copious amounts of data continuously as all consumer touchpoints are instrumented for data collection.  Incorporating the data in real time to drive better decisions across the consumer’s journey and improve overall business processes will be a key objective as enterprises adopt continuous intelligence practices as predicted by Gartner.

Edge Computing: Expect advances in edge computing in the coming years. In a bid to be privacy compliant, B2C companies are exploring how consumer data can be stored and processed on the mobile device itself. This will not only expedite data analysis and content delivery but also keep consumer information private.

Chris McGugan, CTO, Avaya

Will 2020 Be the Year of the Cloud for Small Businesses? While a majority of enterprises currently use some form of public or private cloud services, many small businesses have not yet fully embraced the benefits of cloud due to costs, misinformation around cloud adaptability and the perception that it may not even be necessary for the size of their operation. However, according to research from Gartner, more than $1.3 trillion in IT spending will be directly or indirectly affected by the shift to cloud by 2022, which includes small business spending.

In 2020 and beyond, small businesses should be looking to the cloud to stay competitive, and new subscription service models are making cloud communications solutions more affordable and customizable than ever before. Business decision makers now have the ability to find the right cloud model based on the size of the company, their growth trajectory, their specific needs and the overall needs of their industry. Cloud services have already revolutionized the way we do business on a daily basis and will continue to do so. However, the perception among many small business owners previously was that cloud adoption was typically only attainable to large enterprises. 2020 is the year of cloud migration for small business – here is a look ahead at this trend and ways that SMBs can transition to the cloud.

The Right Cloud Services for Your Small Business: The Software-as-a-Service (SaaS) model has been around for a while and is being applied to cloud communications solutions. Finding the right public or private cloud is becoming easier and enabling businesses of all sizes to pick and choose the solutions they need and passing on the ones they don’t. In 2020, we will see a shift of cloud services aimed at small and medium sized businesses due to this customization and to subscription service models that can be a great step on the path to cloud.

Cloud Security and Preparing for Quantum Computing: While large enterprises have fallen victim to data breaches over the past few years, it doesn’t mean small businesses can ignore their cybersecurity needs, especially as quantum computing becomes a reality. Traditional encryption, even on cloud services, are vulnerable to the power of quantum computing and private encryption will become more prevalent in 2020 to prepare for potential breaches.

Leveraging Cloud and 5G for the Remote Workforce: The modern workplace is more fluid and flexible than ever. Cloud collaboration tools have made the remote workforce a reality, and this will continue to grow even more in 2020. For example, with the roll out of 5G, downloadable apps across all devices will enable workers to seamlessly connect with each other reliably in real time (i.e. screen sharing with minimal lag) without having to be in the same physical location.

On the other hand, cloud collaboration and communication tools running natively on a server means less software to download, and platforms will be able to stream uninterrupted across a 5G network. From team communication tools to virtual meetings, employees can be connected to the company’s network and infrastructure quickly and securely from any location – providing small businesses with access to top talent that was previously hands-off.

2020 is poised to be the year of the cloud as adaptability is more attainable than ever. With the rise of 5G, the remote workforce and prevalence of subscription services, it’s the perfect time for your small business to move to the cloud.

Women

Sharon Miller, Managing Director, Head of Small Business, Bank of America

Women are a force to be reckoned with. More and more are opening businesses. They’re starting businesses for different reasons. Many are tired of working for the corporation. Others are turning their side gigs into businesses.

Women will continue to accelerate the growth of their businesses. We’re supporting them through the Bank of America Institute for Women’s Entrepreneurship at Cornell. Women can get counseling, training and certifications. We want to help them get them past the million dollar mark and get bigger market share.

Suzan Kereere, Global Head, Merchant Sales & Acquiring, Visa 

In a survey of U.S.-based female small business owners conducted by Visa, 73% reported difficulty in obtaining the funding they needed to start their own business, and 61% are self-funded.

Female entrepreneurship is undoubtedly on the rise, but many challenges still exist, specifically around funding opportunities for female founders. To help in their pursuit of business expansion, women entrepreneurs in 2020 will tap into the power of data more than ever before.  If you’re going to compete as a business, big or small, you have to figure out how to use data and technology to make your business and your personal brands thrive. This year, women entrepreneurs will place an increasingly committed effort to leveraging existing data to start, grow and run their businesses.

With the explosion of cross-border sales inspiring 87% of today’s e-commerce executives to push toward expanding online sales into new markets, small businesses are often initially left behind because they have less resources and capital. And at 39%, female executives currently trail their male peers (48%) in pursuing international expansion to increase revenue (Visa Global Merchant eCommerce Study). But they could be making further gains as female purchasing power is poised for continued growth internationally.

Even as uncertain dynamics in the international economic environment can make cross-border trade seem even more complex, in 2020 we will see a significant rise in the number of women entrepreneurs expanding their businesses internationally, specifically women-owned businesses in the retail and e-commerce industries who are looking to capitalize on the boom of cross-border, international sales.

Meredith Schmidt, EVP and GM, Salesforce Essentials

Women and minority-led small businesses are finally getting the recognition and support they deserve. With new spaces like the Riveter, The Wing, and online communities like Alice growing, women and minority business leaders are finding like-minded leaders, and safe and welcoming spaces to learn and grow.