The global economy is a constantly evolving entity, and one that provides a continual challenge to SMEs and independent ventures throughout the world. Most pertinently, it forces business owners and entrepreneurs to become more strategic in their thinking, especially when it comes to deploying capital in the pursuit of future growth.
While the decision to consolidate or invest heavily in business development is a difficult one in the current climate, the American economy usually provides an accurate barometer for gauging consumer confidence and prevailing trends. As the world’s dominant economy, its performance has a huge impact on the strategies adopted by international investors and businesses.
The Year Ahead: Economic Trends and Opportunities for Small Business Growth
With this in mind, it is worth noting that the U.S. economy is entering a fascinating period at present. According to offshore investment firm SPI Sanlam, the Federal Reserve’s decision to taper its existing £85 billion per month stimulus program will have a significant impact on the economy. In specific terms, it will reduce this by $10 billion in asset purchases across both Treasuries and U.S. Mortgages, and this has come as a surprise to economists in the wake of mixed data releases and the national debt ceiling.
While the Federal Reserve remain adamant that the economy is robust enough to bear the impact of tapering measures, however, there is bound to be a period of transition which influences consumers and small business-owners from across the globe. The question that remains is whether this is enough to destabilize the positive sentiment that has developed among business owners throughout 2013, which had encouraged many entrepreneurs to make plans for funding growth and diversifying revenue streams in the year ahead.
How Should SMEs Look to Expand in 2014?
A small business infographic released by Balboa Capital revealed the true extent about the level of sentiment among SMEs at the end of 2013, with 73% of independent ventures declaring confidence in their futures. More importantly, it provided an insight into the approach that small business-owners were planning take to expand their ventures in the year ahead, and this information can serve as a template for companies who are grappling with the decision of whether or not to reinvest their hard-earned capital. Consider the following: –
Increased Investment in Marketing and Outreach
According to the infographic, approximately one in three small business owners will increase their marketing efforts in 2014. The growing influence of Cloud-based CRM software will be a key feature of this drive, as businesses look to invest in tailored and smart technology that enables them to effectively target a motivated consumer base. On an additional note, social media resources such as Facebook and Twitter are now beginning to integrate paid advertisement channels and analytical metrics into their websites, which is changing the perception of the medium as being free to access and will therefore trigger a higher commercial spend in 2014.
Investment in Capital Equipment
Approximately 25% of companies will also invest more in purchasing capital equipment in the year ahead, as they look to build the value of their business and streamline operational procedures accordingly. This is always a popular investment for SMEs, as this type of equipment has an extended life and can therefore be categorized as a fixed and valuable asset. Not only can commercial ventures look to add value by investing in capital equipment, however, but they also have the opportunity to procure items that play a pivotal role in improving its design, manufacturing and delivery processes over time.
Team Building and Higher Volumes of Recruitment
The recent survey also suggested that a quarter of SMEs were hoping to invest more in the recruitment of staff in 2014. This not only applies to the recruitment of individuals on permanent contracts, however, as 2013 was the year that freelancing finally entered the business mainstream in the Western world. Take the UK, for example, where the number of companies hiring freelancers and independent contractors across multiple sectors rose by more than 30% throughout 2013 alone. This trend is being replicated worldwide, and therefore set to continue on a larger scale during the next twelve months and beyond. With this type of hybrid staffing model ideal for the majority of SMEs, many will look to invest in adapting the infrastructure of their business in 2014.
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