Find Your Growth Sweet Spot in the Demographic Shifts Around 2030

As we mentioned in our last article, small business owners are in uncharted waters. However, all business owners can benefit from market research that highlights potential changes in customer behavior as the population shifts to a multi-cultural society. Marketing strategists and product designers use this kind of information to envision what customers will want to buy in the future.

Here are three key population shifts to create ideas for what your customers may want to buy as we move toward 2030

  • The mixed-race population grew from 9 – 33 million from 2010 – 2020 and will keep growing
  • Black consumer purchasing power is expected to grow by $900 Billion  
  • The Latinx small business growth potential could be over $2+ Trillion with the right resources

These population shifts suggest that women and diverse business owners in particular now have many big opportunities to grow their businesses. Brainstorming with employees, colleagues and loyal customers can generate many ideas about new and better products the company could develop and deliver. BIPOC consumers have been vocal about wanting better products designed from the customers desired look, lifestyle, values and cultural perspectives. Demand for personalization is expected to be high. Whole new micro-niches of customers may emerge which create demand for new products and services. 

What opportunities do these population trends and shifts mean for your customers and business? 

Sources of data:  U.S. Census Bureau

Source: Marketing to the multifaceted Black consumer by Shelley Stewart III, McKinsey & Co. 2022.McKinsey and Company research

Upcoming Two-Part Series for Artists to Grow their Business

Start using easy tools to find the right business growth opportunity for your company
Find Your Magic and Take it to Market!, Oct. 26 & Nov.2 on-line

In this two-part series learn proven methods to find the right opportunities and path to sustain and grow your business/organization with an arts or creative focus.

Facilitator:  Darlene Crane

Sponsored by Intersection for the Arts of San Francisco 

Sliding scale fee from $10 – $40, register now to purchase tickets that fit your budget. Registration closes on October 26. 

Eventbrite Link to Two-Part Series on Business Growth

Small and Mid-size Businesses Can Navigate Uncharted Waters

Mid-year corporate business forecasts for 2023 are showing up and there is a lot of data about small businesses, specifically the loss of revenue through the pandemic, permanent closures and struggles.  The surveys of small business owners’ opinions on the future of their business have been optimistic until the rapid rise of inflation.  

The National Federation of Independent Business Owners (NFIB) is a leading source of data on small businesses.    Every month they update their survey of independent business owners.  The headline from the May 2022 report was 

Small business optimism is at a 48-year low. 

The pressure of inflation is the number one pressure on optimism.  

Click here for the full report.  

This dramatic drop in small business owner optimism points to a long-term struggle and complex decisions for all independent businesses.  Envisioning a future under volatile conditions is unfamiliar territory for small businesses in particular.  Owners must be focused on daily operations and health standards just to survive.  

Now, small business owners are in uncharted waters.  The combination of domestic and global uncertainty makes it extra challenging for planning, funding and implementing recovery strategies. 

The article this month kicks off a series of articles about the future of small and midsize businesses.

Stay Above Survival Levels 

Guidant Financial, a fintech company, gathers and reports small business trends with a broader view of small  businesses.  

The results of their 2022 report indicate that 65.3 percent of their respondents are profitable.  47 percent were somewhat to very confident about the future.  At the time of the survey, hiring was the number one challenge. 

For the entire report go to: https://www.guidantfinancial.com/small-business-trends/

Guidant made the effort to gather information on businesses led by people of color. I appreciated their transparency about the demographics of their study.  They indicated that 84 percent of the respondents were Caucasian owners of businesses. 

The results from the Guidant Financial study were specific about the ambitions and concerns of owners of color.  

  • 74 percent of diverse businesses want to sustain and grow their businesses.  
  • In 2022 the number of businesses formed by people of color is flat  
  • The level of confidence their business will survive the pandemic is about 6% lower than white-owned businesses. An additional 6% of diverse business owners were unsure.

The good news is that diverse businesses want to sustain and grow their businesses.  The not so good news is answering the question “What is needed to increase confidence and results that make longevity of their businesses a reality.”

For the complete report go to: https://www.guidantfinancial.com/small-business-trends/people-of-color-business-trends/

Uncertainty is a key topic in my work with the chambers of commerce that serve diverse business owners.  Opportunities for growth and profitability do exist.  Owners are unsure how to look beyond short-term operations to a future strategy led company and risk management. Owners may not know that methods and tools exist for managing companies facing higher long-term risks.  In addition, the costs of advanced workshops are a constraint to participation.  

Small business owners, especially those over five years in operations, build their success on doing strategic thinking and action. The investment in advanced skills has been a key success factor for mid-market companies that grow to $20 – 50+ Million or more in gross revenue.  Honing deeper skills and building a toolbox for quickly refining strategies, plans and becoming experts in implementation does raise overall company performance and owner confidence.  (Harvard Business Review, Mid-Market Growth Strategies, Gary Wolbers and Arun Pillutla, December 2021)  

The questions we are hearing from owners and chambers of commerce now are: 

  • How do I identify the winning strategies or products that will sustain my business? 
  • How can I afford the high costs of traditional and modern marketing and social media? 
  • If my financial statements are weak at this point, how do I present a viable plan and forecast that funders will support? 

Small businesses can get answers to these questions from many sources.  U.S. Small Business Administration and local economic development organizations are subsidizing introductory executive development and some consulting.  Owners who are committed to a career in business ownership will benefit from investing in their professional development and a customized set of business methods and tools.  With critical thinking, project capabilities and well-honed company methods, growth potential improves and risks are managed proactively. Forecasting consistency and reliability are the keys to acquiring the funding companies need over the business lifecycle to achieve good exits or transfer to future generations.

Closing Comments

Charting a path through these difficult time is more than a quick pivot. Future articles will focus on market strategy, planning, transforming operations, funding and implementation. To get started on mapping out the future of your business ere consider the list of the successful strategies graduates of our programs used to recover from the 2008 Great Recession. Many of these businesses are still in operations and growing. The individuals who closed their business made thoughtful choices on new careers.    

  • Develop new products they were passionate about but did not know how to get it to market.
  • Improved their capabilities in marketing to their ideal customers. Created strategic messages and consistent communication.
  • Expanded in their existing market sector. Food industry company with specialty in catering opened a restaurant which is doing well in right location.
  • Professional services company offers a wide range of products and services. Easily responds to shift in market conditions.
  • One individual did not want to continue being a solopreneur in her professional practice. She called on connections to get a senior position in her specialty. She secured valuable contracts internationally. I was pleased to see that she was able to retire.

Successful outcomes in unprecedented times require both well structured and thoughtful business and personal decisions. Do not rush through major decisions. Call on professional and personal supporters and evaluate as many options as you can.

Join our workshop on July 26 to get an introduction to The CraneWorks set of tools for strategic thinking and action. In the future newsletters expect more specifics on the options for finding your path forward.

Darlene

Contact Us

Contact us for more information on The CraneWorks’ SME programs and advising services.  

Enjoy the summer and support a positive future for small and mid-size businesses!

Darlene Crane

Quote for inspiration:

Remember to look up at the stars and not down at your feet.  Try to make sense of what you see and wonder about what make the universe exist.  Be curious.  However difficult life may seem, there is always something you can do and succeed at.

It matters that you don’t just give up.

Stephen Hawkins

  • (1942-2018), cosmologist

UPCOMING WEBINAR

Join our Great Decisions Framework orientation session to understand how the value creation mindset is key to creating the winning formulas for your business now and in the future.

Tuesday July 26, 2022

10:00 AM to 11:00 AM PDT

https://www.eventbrite.com/e/the-great-decision-orientation-more-value-than-just-money-tickets-373443217717

Small Businesses Deserve More Than One Week of Recognition and Support!

May 2 to 6, 2022 was Small Business Week and I am pleased to see the growing national attention this sector deserves.  We learned during the pandemic that small businesses contribute 47% of new jobs and half of the Gross Domestic Product (GDP).  California has the highest number of small businesses 4.2 million as of 2022 per Shopify (https://www.oberlo.com/statistics/number-of-small-business-in-the-us). California has 40% more small businesses than Texas which has the second highest number of small businesses in the nation. Eighty-three percent of new jobs created in California in 2021 were created by small businesses. The U.S. has  61.2 million small business employees in the US, which make up approximately half (46.8 percent) of the total US workforce.

The small business sector struggles every time there is a bump in Covid-19 cases, which is now endemic in the population.  Business districts across the country lost local restaurants that were institutions families enjoyed for decades.  Retail businesses of all sizes are searching for new business models to survive.  

Business owners who want to grow need to be celebrated and cultivated all year long. Small businesses can benefit from better combinations of low cost loans, grants, and equity funding. Furthermore, customized learning on advanced topics like executive leadership, decision making, and product development and implementation.  In California high levels of financing are required to bring the small business sector back.

UPCOMING WEBINAR

If you would like to learn more about how to strategically guide your company’s growth and implement your strategic objectives, join me on May 24 and 25 for a three-hour workshop on “The Great Decision Workshop: More Value Than Just Money”.

Details below:

https://www.eventbrite.com/e/the-great-decision-workshop-more-value-than-just-money-tickets-315862301647

May 24 11:00 am – 12:30 pm

May 25 11 am – 12:30 pm

Contact us at info@thecraneworks to get a $175 discount code.

Have a Plan and Timetable Before You Leave Your Professional Job

The exodus of millions of workers from standard employment is impressive. I left corporate life many years ago and it was the best decision I made about my career. Being independent allowed me to deliver products and services that I knew I could not create inside corporations.

Making the leap to total independence was a two-year effort.  Here are some key points for professionals who are starting their own businesses after years in working in corporations.

  • Plan at least six to twelve months before you quit your job
  • Test your future business model with some moonlighting before you quit
  • Have a financial plan for being successful and backup plan in your case your venture does not work out
  • Pay for expert assistance to increase the potential for success of your venture
  • Consider buying a business if it is close to your desired business endeavor

Two stories generated the list above.

Two future owners I knew invested time and money to create an employment services business. They did work at it for a number of months.  However, they did not get hands on experience in the exact business operations they would be delivering. Within two weeks of opening the business, they knew it was not what they wanted. They closed down the business within two months. It is great to dream, but also get a dose of reality before taking the leap to ownership.

If you are clear about a business line you know you were born to be in, then consider finding a company that fits your goals, work style, and desired business model. Purchasing a business can reduce the risks of going through the startup and launch phases. 

There still is risk if you take over a business because you will eventually have to immediately satisfy customers, who expect consistent products and services. One way to reduce the risk of a take over is to retain the owner as a consultant for a specific transition period, frequently one year. Then the customer base will be better retained and the take over of full operations less stressful. Hiring an expert consultant in the business line is also done frequently.

If you feel that starting from scratch is the best route for you then explore the many resources programs and services for startup businesses. Public sector, non-profit and private programs and services are accessible remotely.

Tactical Tips:

  • Budget for all the resources and needed
  • Plan to create intellectual property or products to distinguish yourself from competition in your field.
  • Create a work environment and team that brings out the best in you as owner, decision maker and leader   

Deep Thinking Required About the Future of Existing Business

We define an existing business as a business in full time operations for at least a year with a full-time owner or hired operating manager. The owner is accountable for making decisions and shaping operating goals and key processes. Now owners are faced with complex decisions across the whole lifecycle. Serving these owners is a journey through major transactions’ businesses go through over the whole lifecycle which includes:

  • Long-term planning
  • New product development and launch
  • Site expansions
  • Adding new business lines
  • Funding raises
  • Exits and Purchases

These are not pivots, these are major growth initiatives or structural changes of businesses requiring thorough preparation and thoughtful actions.

Many businesses are evaluating these major initiatives considering the persistent levels of risk on several levels. Also, new opportunities are emerging as the economy and social environment shifts. This is the time to set up a process for identifying and working through major decisions. Consider these suggestions to build you strategic decision-making process.

  • Write down clear and brief descriptions of the decisions and the timeline for major decisions. This make it easier to work toward a decision and sound result.
  • Obtain reliable information from your trusted team with a balance of quantitative and qualitative perspectives. This team should include your CPA, financial advisor, attorney, and trusted business advisor. Bring your family members and trusted colleagues into making big decisions.
  • Avoid holding too much information in your head because you may forget or feel overwhelmed.
  • Write down the answers to key questions and insights you are gaining as you work toward a decision.
  • When you do make the decision, commit to working towards the desired end results.