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FUTURE OF SMALL
BUSINESS REPORTOctober 2016

2.
COMPETING WITH BIG BUSINESS
Industry-shifting trends mean that this is a time of tremendous change, but also
incredible opportunity for small businesses.
Technology, combined with economic and demographic changes, mean that
small businesses can compete with big business like never before.
vs.
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3.
THE BIG ARE GETTING BIGGER,
WHILE THE SMALL GET SMALLER
The number of companies with over ten thousand employees grew by 90 percent.
While the number of single-person businesses grew by 50 percent.
The average size of a small business has
shrunk by nearly 20 percent and new small
businesses are starting leaner.
In 2001, the average new small business
started with over 6.5 employees. In 2014,
that number had dropped to 4 employees.
90%
50%
2014
2001
20%
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4.
A NEW GOLDEN AGE OF SMALL BUSINESS IS EMERGING
Projections show that the number
of U.S. small businesses will grow
from 30 million in 2016
to over 42 million in 2026.
2016
2026
30 Million
42 Million
10 20 30 40 500
Nimble small businesses are better suited
to the realities of the 21st economy.
The most successful small businesses are
capitalizing on new opportunities, adapting
when needed and pivoting to serve customer
expectations in a rapidly changing world.
!
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5.
FIVE TRENDS THAT WILL GIVE SMALL BUSINESSES A
COMPETITIVE EDGE OVER THE NEXT DECADE:
1. World-class business infrastructure.
2. Insightful data.
3. A growing pool of on-demand talent.
4. Online marketplaces.
5. Cost-effective online advertising.
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1: LOW-COST, WORLD-CLASS BUSINESS INFRASTRUCTURE
Today, small businesses have access to the tools − from world-class manufacturing, logistics and
cloud computing − that were once the sole domain of the big guys.
Why It Matters:
Successful small businesses win by using business
infrastructure, like cloud computing, that turns fixed costs
into variable costs, allowing them to scale their resources
up and down and only pay for what they use.
Google Cloud Service
change in cost over last 18 months
50%
$$$
62%
Small businesses operating in the cloud
$$
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2: DATA, DATA AND MORE DATA
We’re in the middle of a data revolution. Data is the new currency of business and it is growing exponentially.
Why It Matters:
Successful small businesses win
by making sense of the mounds
of data at their disposal.
of the world’s data
was created within
the last two years
90%
By 2020, at least
33% of all data
will pass through
the cloud
44x
Data production will be
in 2020 vs 2009
2.5QUINTILLION
bytes of data
created daily
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3: RISE OF ON-DEMAND TALENT
The rise of the on-demand economy is leveling the playing field between small businesses and larger
corporations. This growth is part of a broader long-term growth trend in the contingent workforce.
Why It Matters:
Successful small businesses win by finding the
right people for the job without having to take on
the responsibility of hiring traditional employees.
Of the U.S. workforce, on-demand workers have risen...
202020161991 17% 43%
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4: CONSUMERS WANT MORE NICHE PRODUCTS & SERVICES
Consumer demand for niche products and services, which small businesses are uniquely
positioned to offer, are on the rise.
Consumers are increasingly dictating what they want, when and where they want it. Agile small
businesses tuned into these conversations will be able to listen to their customers and deliver the
products, services and experiences they demand.
For example, craft breweries expanded their share of the
U.S. beer market from ~5% in 2008 to >20% in 2015.
Why It Matters:
Successful small businesses win by taking
advantage of online marketplaces to gain
access to millions of customers at the click
of a button.
$$
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10.
5: COST-EFFECTIVE, TARGETED ADVERTISING
For Developers:
For just $20,you can buy 1,000impressions
for a sponsored photo on Instagram. Want video?
You can buy 1,000impressions on Hulu for an
in-stream video ad for only $35.
$55
$20
+$35
Small businesses will never be able to compete with big business when it comes to mass
advertising campaigns. But in the age of the Internet, there’s an opportunity to spread your
message on a global level. For example...
Why It Matters:
Successful small businesses win by amplifying
their message to targeted customers through
online platforms.
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THANK YOU