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Small Business Trends in 2012: Rough Forecast


Small businesses had better be prepared to bring on their 'A' game next year. One in seven marginally successful businesses recently polled said they will be pushed to the brink and may close if their revenues drop drastically over the next 12 to 24 months. For sole proprietors, that figure increases to more than one in five.

The Guardian Life Small Business Research Institute identified stressed small businesses being forced to the brink as one of the top trends that small business owners are likely to face in 2012. Institute researchers surveyed 1,100 business owners in October to gain deeper knowledge and insights about today's small business trends .

But even for stressed businesses on the brink, the researchers offered light at the end of the tunnel if businesses can boost productivity . A difficult economy presents an opportunity to right-size a company for long-term success, the institute's researchers said. Small business owners should ensure they have the right people in the right positions so they can focus on growing the business.

There will be continued economic volatility in 2012; 44 percent of small business owners told the institute that the economy is the "one thing that stands between where you are today and growing your company." The antidote, researchers suggest, is to develop and deploy integrated action plans that address short-term issues as part of a comprehensive, long-term planning process.

Two other key trends that will affect small businesses next year are that larger companies are expected to aggressively market to prospects formerly considered "too small," and election-year campaign rhetoric is expected to create an atmosphere of tension and negativity, the survey found.

To defend themselves against the possibility of larger companies trying to poach their customers, small business owners should seek ways to demonstrate how their companies are more responsive to customers or able to provide more customized, localized or cost-efficient service, the researchers said.

Human nature and the political processes being what they are, the researchers said, small business owners should not be surprised when presidential candidates and the media devote a great deal of time and attention to how bad things are or how bad they might become.

Institute researchers suggested that optimism is the best defense for negativity. If small business owners exude a sense of confidence, optimism and focus, their customers and employees will feel it and respond accordingly.

"The ongoing uncertainty of the economy, increased competition and the impression of negativity surrounding election-campaign rhetoric will greatly affect small businesses in 2012," said John Krubski, research advisor to the Guardian Life Small Business Research Institute. "Anticipation of these issues, coupled with guidance on how to tackle them, will help small business owners maintain and potentially grow their business in the new year."