A few significant changes in the SMB landscape could change the way they operate and how quickly they grow in the near future. Stephen Sheinbaum, founder of Bizfi, a company offering business finance solutions, told us about three changes that he thinks will most significantly affect SMBs in the coming year.https://o1.qnsr.com/log/p.gif?;n=203;c=204663295;s=11915;x=7936;f=201904081034270;u=j;z=TIMESTAMP;a=20410779;e=iMore Equipment Financing
According to Sheinbaum, the biggest trend for small businesses in 2016 will be greater spending on business equipment. He attributes this to the fact that in December, Congress passed a spending bill that makes the Section 179 deduction permanent, at a $500,000 cap.
The bigger deduction covers computers, furniture, vehicles and machinery. Under the provision, small business owners can deduct the full purchase price in the year they bought the items. This means that businesses can do more long-term planning and put the money saved in taxes back into the business right away.
Some small and medium-sized businesses may also benefit from the Section 179D deduction, which allows building owners who build a new energy-efficient building, or retrofit an existing one, to meet certain benchmarks to get a deduction that maxes out at $1.80 per square foot.
Fifty-five percent of U.S.-based small businesses don’t have a website, according to a GoDaddy-commissioned global survey. It seems counter-productive to not have a website in our digital-oriented world, considering that 97 percent of consumers search online for products and services. This means that one out of every two small businesses is simply not there for customers to find.
The biggest reason for this lag is that many small businesses don’t have the internal expertise to create and maintain their own websites. They also over-estimate the cost involved in creating one.
Sheinbaum says this year the good news is, thanks to new tools that make it a snap (and fairly cheap) for anyone to create a website without using any code, large numbers of small business owners will get on the Internet. They can also jump right to the most dynamic option, a mobile friendly website. In this day and age, it is critical to be mobile-friendly since mobile digital media time in the U.S. is now significantly higher at 51 percent compared to desktop at 42 percent.
For SMBs that just want to build a mobile site, DudaOne offers a simple drag-and-drop mobile website builder with step-by-step directions called DudaMobile. You can build and publish a mobile site with DudaOne for free, but they charge a small monthly fee for one of their premium plans.
An Expanded Use of Technology in Financing
SMBs are often cited as the major driver of economies and a force in job creation, but they still have difficulty securing proper financing in order to prosper. This is primarily because their finances are high in complexity, yet low in scale. For traditional lenders such as banks, extending credit to small businesses is often too costly, given the small loan size.
FinTech (a contraction of “finance” and “technology,” defined as the use of technology and innovative business models in financial services) companies have made it faster and easier for small businesses to get the capital they need.
According to Sheinbaum, 2016 will be a breakout year for FinTech because there will be more partnerships between them and traditional banks. FinTech is providing alternative ways for SMBs to secure funding for their growth by embodying a new set of products tailored to their needs. These include marketplace (“peer-to-peer”) lending, merchant and e-commerce finance, invoice finance, online supply chain finance and online trade finance.
Banks will get the technology they need to make lending to small businesses cost-effective without building their own platforms from scratch or trying to patch new technology into their legacy systems, meaning more accessible funding options for small businesses.
Growing an SMB and making it profitable is challenging on many fronts, but by taking advantage of these three seemingly unrelated developments, things could get a little easier.