The new annual Yelp Small Business Pulse survey says that 85 percent of American small businesses active on Yelp expect their revenues to grow, estimating a 26 percent increase in 2016.
Yelp surveyed 900 small businesses from various industries to understand their outlook for the year.
Small Businesses are Confident About 2016
The Yelp Small Business Pulse found that small businesses in the restaurant industry are most confident about 2016, with 92 percent expecting an overall revenue increase. Young businesses also appeared positive about their prospects this year, hoping for a 48 percent growth on an average over the year.
Michael Luca, Harvard University Professor of Business Administration and Yelp’s Economist in Residence says, “It’s interesting to peek into the minds of small business owners, to see how they’re feeling and what they’re thinking about. This group of businesses is clearly optimistic, which is consistent with relatively strong consumer sentiment and a recent uptick in retail sales.”
Address Challenges with a Clear Focus
Despite the overall optimism, small businesses face several challenges. According to Yelp’s survey, developing competitive growth strategies is the biggest challenge for small businesses today. Specifically, 60 percent of small businesses say attracting and retaining customer is the most critical issue. Other challenges include limited marketing budgets (32 percent) and time spent on non-core business elements (18 percent).
To achieve success in 2016, businesses need to stay focused and adapt themselves from time to time.
Here are some tips to succeed this year:
Think Big, Stay Nimble
Thirty percent of businesses said competition from larger businesses is the biggest challenge they face this year. While larger companies have an obvious financial advantage, small businesses are better positioned to receive feedback from customers and adapt quickly to changing consumer trends.
Stay in Touch With the Community
Seventy-nine percent of businesses believe digital tools help add a more personal touch in the communities and allow them to cater to the individual demands of their customers. By using the right digital tools, small businesses can reach more customers without spending much. As Dr. Luca says, “With an expanding set of tools to engage with customers, small businesses can leverage consumer feedback platforms to build higher-quality customer relationships.”
Channel the Startup Mentality
According to the Yelp Small Business Pulse, startups are by far most positive about their revenue growth in 2016. Many small businesses are following in the footsteps of startups to adopt disruptive technologies that can turn out to be the real game changers.