With a turbulent election season in the rear-view mirror, entrepreneurs are moving forward with confidence in 2017. A reported increase in optimism among the business community is creating an environment for small businesses to rally. In fact, nearly seven in 10 U.S. small and medium-sized enterprises expect significant revenue growth in the next year, according to an American Express report.
Because the small business space is so dynamic, and particularly in light of newly-elected government officials looking to effect major changes, it’s more important than ever for entrepreneurs to keep an eye on new regulation, developments and trends. Here are five key trends that will define small business in 2017:
- Regulation is a huge talking point with regard to the new Trump administration; the president has already garnered attention from the small business community with his executive order to cut regulations, and this will be something to watch closely in 2017.Recently, Lendio conducted a survey showing 41 percent of small business owners believe Trump’s recent executive order on business regulation will help their business.Regulation will continue to be a hot topic in the fintech world, with the future of the state-by-state licensing system in question. In December, the Office of the Comptroller of the Currency (OCC) announced it is considering making special purpose national bank charters available to fintech companies. Additionally, we’re seeing many banks forming partnerships with tech providers to make it easier for customers to share their data with third parties through application programming interfaces (APIs). Compliance with regard to APIs will become a more important topic as technology and small business collide.Potential developments such as these are the reason the industry and the regulations controlling it need to be closely watched. There will be ups and downs, changes and curve balls until the industry matures.
- Technological advances are always unfolding, with automation and artificial intelligence modernizing processes in all industries. Technological advancements in data and analytics, social media and mobile computing are helping small businesses operate more efficiently and competitively, and we’ll see further expansion in this area in 2017. As mobile technology advances, look for more widespread mobile payment options such as Apple Pay, Android Pay and Samsung pay to become essential to small business.
- Convergence is on the rise between banks and non-traditional lenders. As marketplace lending increases its share of the small business loan transaction pie, banks and other traditional financial institutions are starting to accept and recognize that fintech companies are here to stay. Marketplace loans continue to transform the lending process by offering more loan options with fewer regulatory and infrastructure constraints than traditional banks. This is creating an atmosphere ripe for partnerships and more, with banks looking to adapt some of the practices of the fintech industry.Last year JPMorgan Chase created Chase for Business and a partnership with online lender OnDeck Capital, focused on prioritizing and streamlining the process of small-business lending. Similarly, Wells Fargo launched its small-business loan-focused product, FastFlex.The convergence of and collaboration between banks and marketplace lenders will continue to grow this year, with banks focusing more on automation and marketplace lending focusing more on building strategic partnerships. This is good news for small business owners who need diverse options for quick capital.
- Franchising is growing for the seventh consecutive year in a row, according to an International Franchise Association report. Positive consumer spending trends and the President’s promise to reform labor regulations are increasing optimism in the franchise sector, where nearly 250,000 jobs could be created in 2017, according to the report.Lendio recently entered the growing franchise world, offering Lendio Franchises that help small business owners find the loan they need to grow their business by leveraging Lendio’s business loan marketplace.Watch for further developments in the Fight for $15 minimum wage movement and changes in immigration policy in 2017, which could both directly impact franchises.
What do these trends as a whole mean for small businesses and the economy in 2017? An optimistic business sector with access to more technological advances and funding opportunities could mean a significant boost in job creation and economic growth—a big win for all parties.