Sasan Goodarzi, Executive Vice President of Quickbooks, told a room packed full of entrepreneurs at the 2017 QuickBooks Connect event in London what he believes are the four big trends that will impact small businesses in the coming years.
#1 – You will serve radically different customers in 5 years’ time
Within 5 years, digital natives will make up the majority of your customer base. These are people who have grown up with social media and who run their lives with swipes, clicks and voice commands. They are part of multiple online communities and pay a lot of attention to their friends’ recommendations. The challenge for business is how to interact with these consumers and secure these recommendations by providing services on demand, one-click shopping and quick delivery.
#2 – There will be a new era of competition
Today’s technology means anyone can put a business idea on Kickstarter and know whether it’s got potential. If you decide to launch, you can trade internationally from day one and can source the talent you need to build your business from anywhere in the world using resources like Upwork. So a new competitor to your business can be up and running with investment and talent right from the start. One example is AliPay (part of the Chinese Alibaba ecommerce group) that is slowly spreading west. It launched in Europe last summer to allow Chinese tourists to pay for things when overseas. The Alipay app – which processes 170 million transactions per day and is deeply ingrained into the life of its Chinese customers – will recognise where the customer is in Europe and make suggestions about where to eat, places to visit and shopping offers.
#3 All businesses will be much smarter
Businesses will increasingly access big data and the tools to analyse it, and make decisions based on this insight. Take insurance for example, an industry which been slow to respond to the digital revolution. The way consumers buy insurance will change massively as machine learning is applied to the vast pools of data that insurers have gathered, putting an end to the endless form filling to get a quote. Aviva has already found a statistical link between the purchase of life insurance and safer driving – so those with life insurance get a lower car insurance quote.
Artificial intelligence (AI) will also have a huge impact on our daily lives – virtual personal assistants, video games, smart cars and banks’ fraud detection systems all make use of AI technology. The digital ads and recommendations served up by Google, Facebook and Twitter are all a result of investment in learning machines and algorithms which predict what people are going to buy and read.
Small businesses will increasingly be able to access big data and its insights via third party agencies, whether it’s to analyse customer sentiment on social media, learn customer preferences and serve up product recommendations or target online ads to the most receptive audience.
#4 Accounting will be disrupted
There is a huge amount of venture capital funding being invested in start-ups which will radically change accounting. The growth of companies like QuickBooks is just the start of this disruption.
- Working in the cloud means accountants are much more connected to their clients – looking a real-time data and having more meaningful discussions rather than just doing their year-end accounts
- Increased automation will eventually mean an end to manual data entry e.g. through automatic imports and electronic documents – resulting in real time reporting and less human error
- The growth in cloud based software and its ease of use will mean more companies will do a lot of their book keeping themselves and only pay accountants for the services they really need
- Accounting advice could be replaced by machine learning using the data in accounting platforms to identify key financial health issues – e.g. where they are not performing as well as other companies in that sector.
Small businesses will need to be fit to survive in this new normal and equip themselves with skills and tools do they need to thrive. Sasan’s advice to the entrepreneurs who are working hard to make money is to take advantage of the tools which remove the drudgery from running a business and put more money into their customer’s pockets.