Owners of small and medium-sized businesses (SMB) know better than most the challenges in staying ahead of the pace of change. Without the support of a large team, SMB leaders must wear many hats — from running product development or acquisition to managing marketing channels and balancing the business's cash flow. It can be especially difficult to pause and think proactively about what the future might hold when you're in the throes of day-to-day operations. However, it's essential that these organizations future-proof in anticipation of the potential headwinds and opportunities that may present themselves down the line.

Taking this forward-facing view is crucial for SMBs' ability to compete — possibly even to survive — in changing and competitive market conditions. With that in mind, and with the new year underway, here are five trends that small business owners should keep an eye on for 2025.

1. Embracing AI for meaningful impact

Embracing AI doesn't just mean adopting the latest technology for the sake of staying relevant; it means implementing tools where it makes the most sense for your business. In 2025, expect to see a shift towards leveraging AI in ways that directly enhance operations and customer experiences in these smaller organizations.

This will look different for every type of business. For example, a software-as-a-service business may look to automate repetitive manual processes to improve efficiency, while a marketing agency may apply generative AI to streamline creative processes. Other examples of where AI can cut your workload include: generating engaging social media captions, building templates for newsletters and writing persuasive ad content tailored to specific platforms. No matter your industry, the focus will be on finding efficient solutions that save you time and allow you to focus on your core offering.

2. Economic shifts and cash flow resilience

As is standard at the outset of a new political administration and given the ongoing geopolitical environment, SMBs should be prepared for potential fluctuations in the economy. Despite anticipated rate cuts, there is still some uncertainty about what the new year will bring, making cash flow management more critical than ever.

If you're operating across borders, it's worth considering a multi-currency business account that allows you to hedge against potential volatility. Multi-currency accounts enable you to hold and manage money across borders seamlessly and maintain oversight of your cash flow across supply chains and countries of operation.

3. Preparing for the Gen Z consumer

With Gen Z poised to become the most dominant consumer segment by spending power before 2030, SMBs may need to consider adapting their marketing and service strategies to meet the unique preferences of this demographic. Broadly, this generation values authenticity, sustainability and personalized experiences, and they prefer short-form content (think: TikTok, Instagram Reels). You may consider working with influencers who have developed a genuine rapport with their audience and are trusted to share the best products and recommendations. If your business relies less heavily on wider marketing, you may simply focus on how to organically share your story with the customers you do business with to bring that human element that is so often overlooked.

Consider ways your business can tap into the zeitgeist, capture attention and differentiate from other similar offerings.

4. Navigating tech regulations and data privacy

As every small business owner knows, staying abreast of regulatory requirements is a time-consuming and often complex practice. However tedious, it is also vital to long-term success. Depending on the industry and size of your operation, there may be any number of regulations to follow. Here's one example: data privacy and personally identifiable information (PII) management. There is (rightly) consistent conversation around the responsibility of large and small businesses to protect their customers' information, from their contact emails to their bank details. Building your own data collection safety practices and regularly reviewing your security systems is a great start.

To stay on top of any changing regulations and what they mean for your business, it's a good idea to sign up for newsletters and updates from media outlets covering legal and regulatory news. To go a step further, you might even consider hiringe or designating one or more employees who can focus on managing the implementation of upcoming changes without taking time away from the everyday functioning of your business.

5. Sustainability as a business imperative

Sustainability is no longer a trend; it's a necessity. As consumers and employees increasingly demand environmentally responsible practices, SMBs' must weave sustainability into their operations. This can involve adopting conscious supply chain practices, utilizing green packaging or offsetting environmental impact through programs focusing on carbon removal efforts. By aligning your business with sustainability goals, you not only cater to a growing market segment but also plan for your business' resiliency well into the future.

Looking ahead to 2025

As small business owners look to start the new year strong, understanding and adapting to these five emerging trends will be essential for navigating the complexities of the evolving market landscape. The ability to respond and act accordingly will enhance operational efficiency, while also strengthening customer relationships and loyalty to your organization. In short, staying informed and agile will allow your SMB to meet challenges head-on and seize new opportunities as they arise.




Source: https://www.entrepreneur.com
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Across the world, there is an alarming long-term trend: Companies are struggling to survive. An analysis by Statista shows that companies have been losing their lasting power since 1965. Companies on Standard & Poor's 500 Index were analyzed during 2020, and it was found that the average lifespan of a company was 21 years, a stark contrast to 55 years ago when it was an average of 32 years. The statistics platform then concluded that this number is likely to continue falling throughout the 2020s.

An EY report in 2023 shows that, in fact, the average lifespan of an American S&P 500 company used to be 67 — now it's only 15 years. The report suggests that even some of the most well-prepared companies are not guaranteed to last, and that is worrying. These figures made me wonder how one can build a business that lasts well beyond a century.

As part of a centennial company that was passed to me as the fourth-generation heir in 1993, the Kowloon Motor Bus Company (KMB), founded by my grandfather in 1921, will officially be 104 years old in 2025. In the current climate and having survived the Japanese occupation during World War 2, the global financial crisis and more recently, the 2020 pandemic that shook the world, I am proud that we have reached such a milestone. From my personal experience and further research, I have identified the key qualities to help businesses last a century and beyond.

1. "Adapt or die"

The famous words of Charles Darwin, written in The Origin of Species in 1859, ring true even here in the business world. Staying relevant within an ever-changing world requires companies to adapt to customers' needs and market requirements through thorough analysis, teamwork and rational thinking. I find the example of how LEGO stayed relevant quite inspirational, and many will agree that it is a company that will achieve its centennial status in less than a decade.

Founded by a Danish carpenter in 1932, LEGO began its building blocks with wood and then plastic, with the latter helping it become a brand that is synonymous with children's toys. But LEGO almost faced bankruptcy from over-innovating at the turn of the millennium, as technological advances created a myriad of other flashy competitors. This was when the iconic company analyzed its own errors. Instead of creating new ideas, it began adapting. It modified existing prototypes but with the help of new collaborations with the likes of Harry Potter and Star Wars.

Eventually, it entered the movie business with them. LEGO's adaptability reminds me of how KMB survived crises in the past. Just years after its founding, World War 2 struck, rendering most of the then fleet unusable. While replacement buses were being purchased, the existing routes were supplemented using lorries, which were used as temporary buses. Over more than a decade now, KMB has consistently used this adaptation rule to evolve itself with the times.

2. Balance innovation with stability

In business, innovation usually means risk-taking and sometimes requires one to venture into the unknown. Without innovation, you lose your competitive edge in the market. But too much innovation, and you risk spreading yourself too thin and potentially losing to your competitors. So, how can innovation be part of your 100-year plan? The trick is to balance innovative ideas with the smooth running of the business at hand.

A thorough, data-based risk analysis should be deployed as a core strategy where innovative measures are considered. The culture of the company should be innovation-led but in a steady manner so that good ideas are in constant supply and in use wherever possible. A good leadership strategy within the company should also include a collaborative approach when approaching innovative ideas. You should work internally with your team, as well as use external resources and customer insights to ensure you are continuously, consistently improving. And with intent — never innovate for innovation's sake.

3. Be socially responsible

Business is all about people, be that your own team members, your customers or the wider community the company engages with. Having clear social goals within a company makes up its raison d'être, clearly signaling that the organization is here to stay long-term and to serve the people around it, not just its shareholders.

There is logic to embracing social responsibility within a company, too, so that customers are happy to pay a premium for the goods and services of a company that's perceived to be doing good to society. This point aside, customers are also seeking companies that are accredited for being socially responsible.

A survey conducted by Sezzle shows that among its respondents, more than half being millennials, 81% said it was important for them to purchase from brands that align with their social values. Not all B-Corp companies are new either — Gibsons Games is a 104-year-old jigsaw puzzle business that has survived and thrived using its commitment to serving families worldwide since its inception.

This reminds me of my own company's ethos. From the very beginning, KMB set itself apart by remaining a privately owned company offering public transportation without receiving any subsidies from the government. I personally am proud to say that we are helping 2.8 million people move around Hong Kong by continuing to make commuting affordable, accessible and available to all. As part of our commitment to society, I have also helped establish Friends of KMB, Hong Kong's first volunteer group organized by a public transport company to encourage civic engagement.
But at the heart of it, social responsibility is an innate characteristic that should be embedded into your company from the get-go, and it should have a far-reaching, sincere and long-term impact.




Source: https://www.entrepreneur.com
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With the turn of the calendar comes important personal health checks — the kind of things you do annually to make sure you're staying on top of your well-being. It may be tempting to avoid these checkups. I mean, "If it ain't broke, don't fix it," right? Yet, we don't always know we're "broken" until we look more closely. And we can't get healthier if we don't get checkups, set goals and work toward them.

Your entrepreneurial health matters, too. And while the hustle of running a business can cause you to overlook your entrepreneurial health, it's critical. If you want to be successful and build a company that outlasts your leadership, you need annual checkups.

The goal is to build value within your company that prepares you for the future. This starts with yearly internal culture, personal and value checkups, which result in a process for short — and long-term planning that will set you up for personal, financial and business success. That's why, each calendar year, I set three checkups in motion to ensure good entrepreneurial health.

Checkup #1: People and culture

Every year, I send an internal survey to check the health of my company's people. They are incredibly important to the company's value. The survey takes about 20 minutes, and I use it to produce an employee satisfaction barometer so I have a true measure of the atmospheric pressure inside the business.

A highlight of this survey is that I ask them to rank 20 or so benefits in order of what they'd like to have included in their compensation package. Then, in the coming year, we provide all of the top five and most of the next five benefits. Benefits ranking #11 and #12 might be provided if certain key performance indicators are met in the coming year, and each employee can select the two most important benefits to them. It's a way to understand what's important to the employees overall while recognizing not every employee needs the same things from a benefit package.

Checkup #2: Value

I also complete an enterprise value assessment each year, which helps me understand the value of my company if I were to sell it at that moment. A value assessment helps me identify areas in which the company has increased in value and where our opportunities for growth lie in the year ahead. It also helps me consider whether this year is the right time to sell the business.

For example, if my business is worth $50 million and my wealth gap — the amount of money I need to harvest to meet my personal lifetime wealth needs — is $25 million, it may make financial sense to sell, even if this won't be my last business. For the clearest picture, I always recommend engaging a value advisor — one who is a Certified Exit Planning Advisor (CEPA).

Checkup #3: Personal

Of all the checkups, this is the most often overlooked, which is strange since the new year often brings a time of personal introspection. Let's say your value assessment says that your company needs to enter a period of growth, and your advisory team is telling you that your market conditions are ripe for growth. That means your business will need an injection of cash and time. Is it the right time for your personal goals — as a parent, as a spouse — for you to invest further into your company? Both with time and money? If your personal goals aren't aligned with where your business is heading, you'll need to resolve those issues before you enter into any yearly planning process.

Processing your checkup, planning with a process

Once I've completed those three checkups, I'm armed with the right information to head into planning for the new year, as well as any longer-term strategy. The value and personal checkups help me understand whether or not my business is entering into a period of growth (or what I have to do to get it there) and if I'm preparing to exit my company. With that understanding, I can envision my short and long-term goals. Here are some things to keep in mind:

• Start with long-term thinking — three to five years out. Host a retreat to discuss the vision and path ahead with your company's leadership, using the direction you have from your three yearly checkups.
• Then, take a step back. Together, develop a written plan for the next two years, including both strategy and financial goals. Don't just include numbers — explain how you'll meet those numbers. Give each department leader time in the retreat to explain to their fellow executives how they'll meet those goals.
• Then, focus on the year ahead. Identify short-term goals, opportunities, threats, income-producing and value-producing strategies. Identify the themes within the plan. Do you need more technology? More strategic partners? Operational changes? If you're planning an exit, how can you maintain or accelerate value quickly? This should be your most detailed plan — it's the one you'll start working toward when the calendar turns on a new year.

This time of year is always invigorating for me. Every new year brings unlimited possibilities that really excite my entrepreneurial spirit. Making sure I build a plan that stays true to what I discovered during my yearly checkups gives me the best shot at moving closer to my personal and business goals.




Source: ​https://www.entrepreneur.com
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In order to build a successful business, you need more than just a great idea. You also need good credit. Understanding how to build business credit is vital as it can be used to secure loans, lines of credit, and other financial assistance to help your business grow.

​In this article, we will explore strategies to improve business credit, drawing on insights from business credit bureaus. If this seems like the key to advancing your business, you’re absolutely correct. Let’s get started!

How to Build Business Credit

How do you build business credit? It’s a question that many small business owners ask, and for good reason. There are a number of things you can do like watching your credit utilization, but here are 14 of the most effective strategies:

Establish Your Business Entity

Establishing your business entity is a critical step in legitimizing your business. It involves choosing between several structures, such as Sole Proprietorship, Partnership, Limited Liability Company (LLC), or Corporation.

This choice affects your liability, tax responsibilities, and capacity to obtain funding. For example, an LLC provides personal liability protection and tax flexibility, whereas a Corporation is suitable for businesses intending to issue stock.

​Registering your entity with the appropriate state authorities and obtaining an Employer Identification Number (EIN) from the IRS solidifies your business’s legal standing.

Register Your Organization

Registering your business with a business credit bureau, such as Dun & Bradstreet to obtain a D-U-N-S number, is crucial for establishing a business credit profile.

This registration allows lenders and vendors to assess your business’s creditworthiness based on your business transactions and payment history. It’s a foundational step in building a reputable business credit report.

Set up a Business Bank Account

A business bank account segregates your personal finances from your business transactions, enhancing your company’s professionalism and credibility.

It simplifies accounting processes and supports your case when applying for business credit or loans by showcasing your business’s cash flow and financial health to potential lenders.

​​Apply for a Free DUNS Number

The D-U-N-S number, issued by Dun & Bradstreet, is a nine-digit identifier for businesses. Obtaining this number is free and crucial for building your business credit. It is recognized worldwide and utilized by creditors to assess a business’s reliability and financial stability, which affects your chances of obtaining financing and contracts.

Report to Business Credit Reporting Agencies

Actively reporting your business transactions and financial status to credit bureaus can help you establish and enhance your business credit score. Making sure that your vendors and creditors report your payment history to agencies such as Experian, Equifax, and Dun & Bradstreet can greatly influence your creditworthiness with potential lenders.

Establish Trade Lines with Vendors and Suppliers

Trade lines are credit accounts with vendors or suppliers. Establishing multiple trade lines and ensuring they report your payment history to credit bureaus is an effective way to build your business credit. On-time or early payments on these accounts can positively affect your business credit score.

​Get a Business Credit Card

Securing a business credit card and consistently making timely payments is a straightforward way to build credit. It also helps in keeping personal and business expenses separate, simplifying tax preparation and financial management.

​Apply for a Line of Credit

A business line of credit not only provides flexible access to funds but also contributes to your credit history when managed properly. Regular use and repayment of a credit line can positively influence your business credit score.

Make Timely or Early Payments

Your payment history is a significant factor in your business credit score. By ensuring that all bills, loans, and credit card payments are made on time or early, you demonstrate financial responsibility and reliability to creditors.

Connect with Other Businesses in Your Industry

Networking with other businesses can create opportunities for trade credit, partnerships, and the sharing of financial advice. These relationships can enhance your business’s growth and may also improve your access to credit.

​Join an Entrepreneur Group or Networking Organization

Membership in business associations or networking groups can offer valuable resources, mentorship, and increased visibility. These organizations frequently host workshops on financial management and provide opportunities to connect with lenders who specialize in extending credit to small businesses.

Request Trade References from Suppliers and Customers

Trade references can bolster your credit application by providing lenders with evidence of your business’s reliability and prompt payment history. These references act as testimonials to your business’s financial responsibility.

Borrow Responsibly

When using credit, it’s essential to borrow within your limits. Overleveraging can negatively impact your credit score and overall financial well-being. Demonstrating responsible borrowing and repayment habits will positively influence your business credit report.

​Monitor Your Credit Scores

Regularly checking your business credit report for inaccuracies and tracking your credit score’s progress can help you understand how financial actions influence your credit. Immediate correction of any errors ensures your credit report accurately reflects your business’s financial stability.

Why it’s Important to Establish Business Credit

Establishing a robust business credit profile is a critical step in fostering a healthy and sustainable business. It not only opens the door to financial opportunities but also establishes trust and credibility in the market. Here’s why dedicating time and effort to build business credit is essential:

• Access to Better Loan Terms: A good business credit score can help you secure loans with more favorable terms, including lower interest rates and higher credit limits.
• Separation of Personal and Business Finances: Building business credit helps to separate your personal finances from your business, protecting your personal assets and improving the creditworthiness of your business.
• Leverage in Negotiations: Having established business credit can give you a better standing when negotiating terms with suppliers and vendors, potentially leading to better payment terms and lower costs.
• Preparation for Future Opportunities: As your business grows, opportunities for expansion will arise. Having established business credit ensures you are prepared to seize these opportunities without unnecessary delays.
• Attractive to Potential Investors: A strong business credit profile can make your business more attractive to potential investors or buyers, as it is a testament to the financial health and stability of your business.
• Improved Chances for SBA Loans: Building business credit increases your likelihood of obtaining a Small Business Administration (SBA) loan, an essential resource for growing your business.
• Increased Business Value: Over time, having established business credit can increase the overall value of your business, as financial institutions, and potential partners or acquirers view it as a lower risk investment.

​When you are starting your business journey, it’s essential to establish credit with business credit bureaus. This step not only helps you gain access to lines of credit and loans necessary for funding your business expenses, but it also improves your chances of qualifying for Small Business Administration loans.

While building business credit is not a complex process, the process does require time, strategic planning, and consistent efforts.

Initiating this process early on, coupled with maintaining a positive payment history and making informed financial decisions, can set a strong foundation for a prosperous business future.

Remember, building credit is a gradual process that’s instrumental in paving the way toward making your enterprise thrive.
​
​5 Benefits of Building Business Credit

We’ve already established that business credit is important for getting loans and other forms of financial assistance. But what are some other benefits of building business credit? Here are five benefits that building business credit brings:

1. Builds credibility. Good business credit demonstrates to vendors, suppliers, and other business contacts that you’re a reliable, reputable company.
2. Gives you a financial safety net. If you have business credit, you can tap into it in times of need. This can help you weather a financial crisis or take advantage of opportunities when
3. Track your expenses. Personal and business finances can get mixed up quickly, making it difficult to track business expenses. However, if you have business credit, you can more easily keep track of your business expenses, which can be helpful come tax time.
4. Get better terms from suppliers. Good business credit scores can give you access to better terms with suppliers, such as extended payment terms.
5. Helps you get loans. This is the most obvious benefit of business credit, but it’s worth mentioning again. If you have good business credit, you’re more likely to get approved for loans and other forms of financing.

​Step-by-Step Guide to Building Business Credit: A Checklist

As previously stated, establishing business credit is crucial for obtaining future funding and nurturing a successful enterprise. Utilize this detailed checklist to methodically create a strong business credit profile.

Feel free to print or save this table as a guide to systematically build and maintain a strong business credit profile.
​
Here’s a word from Karlton Dennis on “How To Get Business Credit for Your LLC in 2023” you’ll want to check out after reading:

​FAQs: How to Build Business Credit

How long does it take to build business credit?

When learning how to build credit for business, it’s important to remember that Rome wasn’t built in a day. It takes time to build business credit, usually about 6-12 months. But, the effort is worth it.

Can a personal credit card help with building business credit?

No. You need to use a business credit card to establish business credit. However, your personal credit score may go down since a hard inquiry will be run when you apply for your credit card.

Can you establish company credit if you don’t have any debt?

Yes, it is possible to establish business credit without incurring any debt. One way to do this is to get a business credit card with a $0 balance. Another way to do this is to join a business credit monitoring service.



​Source: https://smallbiztrends.com/
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