The people's voice of reason
The people's voice of reason
In 2024, staying small on purpose seems to be paying off big for small businesses. They're keeping operations small and targeting niche, highly specialized customers. And some business owners find this strategy results in more time, energy, and money to intentionally capitalize on unique, small cap opportunities.
The data tells the story of growth in small businesses for the year. According to NEXT, the Small Business Administration (SBA) reports awarding 38,000 SBA 7(a) loans under $150,000: double the amount they awarded in 2020. Here are the related small-business trends paying off in 2024.
Commercial real estate agent Ryan Beckenhauer of Market Real Estate in Boulder, Colorado, has noticed that small businesses are growing smaller, and that their office and warehouse spaces are starting to reflect that as they shop for business space.
In commercial real estate, many small business owners gravitate toward industrial condos and other flexible spaces. These are small-scale industrial spaces with a 90:10 or 80:20 split of warehouse to office.
"More individuals are leveraging skills acquired at larger organizations to venture out on their own," explains Beckenhauer. And he goes on to say that they don't need a large commercial space as they make that leap to start a business. His clients include engineers, consultants, builders and other tradespeople.
Beckenhauer's clients like the flexibility of being out of an office and being close to their inventory and workshop space. "The clients want to see and touch the finishes," he says.
Small business owners both rent or buy these spaces. But he's seeing his clients opt to own industrial condos to stabilize costs due to rent increases in Boulder. And because these spaces are smaller, it can be easier for new buyers to qualify for financing.
Mariana Alvarez, owner of Controller Works, an online bookkeeping and advisory firm, has noticed that small business owners outsource financial support services because they don't want to increase headcount. "Outsourcing gives them the possibility of having access to the knowledge and the skills of a CFO without having to pay for the salary," she says.
"They don't have to manage or deal with the workload, employment taxes, and all that comes with it," says Alvarez. Additionally, many small business owners in fields like construction are family-owned, and this makes it easier for business owners to hand off delicate financial work to a trusted person with financial experience.
Every small business has recurring tasks that can benefit from some level of artificial intelligence automation. And Alvarez sees a lot of value in using AI for small business bookkeeping.
She explains that you can automate the data entry on Quickbooks. "When you create rules, as long as you create the rules correctly, it pretty much does itself," says Alvarez.
From there, you can lean on financial experts to help you analyze the data and make more informed decisions. She uses AI as a background resource when guiding her accounting clients.
"I believe that we still need the human-to-human interaction that comes with more perspective for financial analysis," she explains.
According to the SBA, 77% of consumers feel that human interaction is still required for a positive customer experience. People turn to small businesses every day for a human experience.
According to Arvind Rongala, CEO of Edstellar, small business workers can show up for their customers but still use AI for routine tasks like customer queries.
"This balance allows companies to scale their operations without losing the personal touch that makes them unique. It's important to remember that AI isn't there to replace the human element—it's there to enhance it," he says.
"By really focusing on one very small weakness that Amazon has, I've been able to carve out a successful business by offering something different," says Lou Harvey owner of Tank Retailer, a retailer of commercial water and fuel tanks. "When you read our customer reviews, many of them actually mention me by name because of how much we focus on customer service and go the extra mile."
One of Harvey's most successful business strategies this year has been to lean into his small, niche market and offer the kind of customer experience that large retailers like Amazon don't.
"Any small weaknesses that Amazon has (however small those weaknesses may be) needs to become a strength of a smaller business focusing on a niche market," says Harvey.
Harvey has his company's customer service phone number front and center on the website to help earn customer trust. "I prominently feature our phone number, and a real person always answers the phone (usually it's me)," says Harvey.
Lucie Voves, CEO and founder of Church Hill Classics, an online, woman-owned diploma framing company that uses sustainable materials, has noticed an uptick in customers seeking services from a business on a mission.
"This year, we've seen a growing inclination for consumers to actively seek out and support small businesses owned by women and minorities," says Voves.
When consumers shop small, they choose to make their dollars count. "Customers are fueled by a desire to promote social impact through purchasing power," says Voves.
Long gone are the days of online retailers "building it and they will come." In 2024 we've seen more small businesses than ever turn to social commerce to sell directly on social media platforms like Instagram Shopping, Facebook Marketplace, and TikTok.
Small business owners are turning toward influencers, social media ads, and organic content to target their customers.
Mike Vannelli of Envy Creative creates online ads for businesses, and he has seen his clients succeed on TikTok of late. "I've seen businesses, especially in retail, use TikTok's short-form video format to make their products go viral. Think of it as word-of-mouth marketing on steroids," says Vannelli.
He uses the platform's algorithm to push a company's content to the right audiences, and it works because TikTok loves storytelling. "I know small brands that use behind-the-scenes videos, customer testimonials, and even playful challenges that tap into trends to humanize their products and build trust," explains Vannelli.
To stand out on TikTok, he says, smaller brands need to embrace authenticity and emotional connection. Show your team, share your journey, and involve your community in content creation.
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