It may be a shiny new year, but it’s full of the kind of uncertainty that makes business owners bite their nails. Will the economy get worse or maybe a little better? Will consumers keep spending? Or climb back into their shells?
In 2012, it will pay to keep an eye on a few key big-picture trends. Here are six that make my list for top insomnia producers:
- Winter sales slump? Retail research firm America’s Research Group says January and February may be deathly slow, as more than 40 per cent of consumers said they overspent on the holidays. That’s a whole lot of holiday hangover. It will likely take creativity to book sales in the next 60 days.
- Ever-shifting markets. Consulting firm Phimation likens the 2012 small-business climate to the agrarian marketplace of the 1800s — that is, highly fluctuating based on the seasons and unpredictable weather patterns. Similarly, innovation will continue to shift the markets around. To combat this unpredictability, be nimble and stay connected to your community, which going forward will be defined by interests rather than geography.
- Rising prices. The discount-deal site Dealnews tracked price changes in 2011, and predicts that airfare, digital cameras, hard drives, desktop computers and groceries will top the list of goods that will see spiking prices next year. That sounds like bad news for many small-business owners who need to keep up with the Joneses.
- Sluggish venture-capital markets. I’m still struggling to believe this, but 2011 was actually a worse year for IPOs than 2010, IPO-research firm Renaissance Capital reported. In 2011, 334 offerings took place, down 30 per cent from 2010. That’s not exactly encouraging for entrepreneurs looking for funding. Though, there are more IPOs already in the pipeline for 2012.
- The urge to merge. Consolidation will continue to sweep through the business world — U.S. mergers and acquisitions announcements hit $821 billion (pdf) last year, the highest figure since 2007, M&A research firm Mergermarket said. Perhaps this is your chance to sell or maybe grow through acquisition?
- Election-year uncertainty. Often, an upcoming election creates inaction on Capitol Hill, as some lawmakers fear hurting their reelection chances. Others could battle to pass laws that might appease constituents. This ‘policy uncertainty’ may similarly stall business owners’ decisions while they wait and wonder.
What business and economic trends worry you most? Leave a comment and tell us what’s on your mind.