The world is evolving at a rapid rate as new technologies disrupt traditional business practices. Almost every industry has been transformed by new technology in recent years. This trend has created significant opportunities for entrepreneurs who launched their products at the right time. In contrast, today’s new entrepreneurs face uncertainty as they try to compete with established companies in both new and existing markets. Although small and medium-sized businesses realized the most significant benefits of new technologies in the past, the consolidation of many industries is leading new entrepreneurs to question whether they will be able to remain competitive in 2018.
Historical Opportunities for Small Businesses
The future can only be understood by making projections based on historical analysis. So, it is important for new entrepreneurs to study what has led to success for existing businesses. Before the 21st century, small and medium-sized businesses were struggling to compete against large corporations. Reaching out to customers was difficult without large media budgets. Once the internet made it possible for businesses to reach customers through direct means at low cost, small businesses began to prosper in every industry. Many of the most successful entrepreneurs found ways to leverage the internet to market their products and services to both local customers and buyers from around the world.
Challenges in the Competitive Landscape
2018 could be a challenging year for small and medium-sized businesses because new technologies, such as Artificial Intelligence and the Internet of Things, will be most effective for large-scale enterprises. Companies selling a high volume of products will gather most data and then use the information to improve all aspects of an offering. Entry barriers will increase in many industries as established haystacks of data become the primary drivers of success. Local businesses will also face challenges as autonomous delivery and virtual reality reduces the value of retail stores.
Best Path to Success
Although most industries will face severe disruption in 2018 as new technologies are introduced, the reality is, adaptive small businesses can achieve growth by leveraging changes in the marketplace. Businesses that cling to traditional models will decline or face bankruptcy, but businesses that adapt to the new reality of the marketplace can realize significant growth. Small and medium-sized businesses that wish to succeed will need to realize that they are not immune from digital transformation. Therefore, they will need to incorporate big data into their own operations.
Growth Industries for Small Businesses
New entrepreneurs who have the luxury of being able to enter any industry should focus on adding value in industries with the best outlook and highest growth. Entrepreneurs who are skilled in software development or engineering should consider working with new technologies that are likely to transform the modern world, such as autonomous driving or the Internet of Things. However, new technologies will have applications in every industry so entrepreneurs can try to connect what they already know with new technology to disrupt established business models.
Scaling a Small Business in 2018
Small and medium-sized businesses that take advantage of market dynamics in 2018 will be able to scale at a rapid rate. Scalability will depend on the degree to which a business incorporates new technology into existing processes. An online t-shirt store, for example, may need to invest in artificial intelligence to create a personalized experience for customers, which is way different than the approach an online business for grocery would opt. An online grocery store might want to invest in developing technology for filtering food according to the calories it contains. Small businesses will also need to leverage data to optimize all areas of their operations, such as marketing, manufacturing, and employee management. As technology evolves at a rapid rate, small businesses must also remain vigilant to recognize new business products that could help to improve the quality of their offerings.
High market dynamism will decrease the sustainability of existing business models when entrepreneurs are not willing to embrace change. The most sustainable business models will recognize that change is inevitable and that continuous innovation is now necessary for success. Small businesses that succeed in nurturing a culture of innovation will be more prepared to adapt when technologies transform their industry. Adapting before competitors will yield significant advantages, so businesses of all sizes will need to embrace an entrepreneurial mindset to maintain a dominant position in the marketplace.
Most entrepreneurs do not have enough capital to fund their own ventures, so it is important to recognize how market dynamics will impact funding in 2018. Entrepreneurs who rely on bank financing should expect loan officers to request data to verify the fundamentals of a business plan. Submitting a loan application without data that substantiates the claims will put entrepreneurs at a disadvantage relative to firms that can prove the viability of their models through data analysis. Venture capital firms will also expect data to drive decision-making throughout the business planning process, and entrepreneurs who can provide the information venture capitalists are looking for will have the greatest chance of acquiring the funds necessary to remain competitive.
Organizing the Right Team
Teams of competent entrepreneurs with a broad range of skills will have the best chance of succeeding in 2018. The amount of knowledge necessary to run a business is increasing as technologies improve, so entrepreneurs who plan to start their own business should consider working with a partner. An ideal founding team will have at least one member with experience working with data and software. Founding teams that are competent in data analysis, product development, and digital marketing will realize synergies that will yield advantages against both new and existing competitors.
Putting It All Together
Running a small business in 2019 will require entrepreneurs to embrace new changes in order to succeed. Entrepreneurs who take advantage of new technologies can realize significant growth that will yield advantages for many years to come. The reality is, small and medium-sized businesses are likely to remain competitive with the introduction of new technologies, but continuous innovation will be required to keep a business model sustainable. Entrepreneurs who are ready to innovate, therefore, should look forward to 2019 as an opportunity to achieve growth, learn new skills, and build sustainable value.