Small business owners and entrepreneurs are optimistic about 2018, despite concerns about issues such as economic policies that favor large businesses and difficulties finding qualified workers. However, the New Year brings with it plenty of uncertainty, and there are a number of trends that are projected to impact small businesses this year. No matter what industry you are in or where you do business, these five key issues are worth considering as you head into 2018:

1 – Hiring: Outsourcing Becomes Increasingly Attractive

The flexibility to work remotely has evolved beyond an occasional perk, with 43 percent of employees in Staples’ 2017 Workplace Survey saying it’s a deal-breaker. This growing demand for increased mobility by workers of all ages is fueling the trend by companies large and small to hire freelance contractors or shift to a virtual employee model.

SCORE’s Megaphone of Main Street Small Business Jobs Report revealed that 18 percent of small business owners replaced full-time employees with contractors during the second half of 2017. The number of freelance workers is expected to continue to grow as the need for good help increases and more entrepreneurs recognize the financial benefits, such as not having to pay employer taxes, benefits, and overhead costs for a full-time team. In addition, more highly talented individuals are working independently, making their skills available to multiple employers rather than a single company.

In the New Year, small businesses are expected to increase outsourcing in the areas of technology, finance, and marketing. Companies considering taking this route will need to establish and preserve a strong connection with their remote staff in order to keep them engaged and productive.

2 – Technology: Cyber Security Continues to be a Challenge

As in previous years, 2018 will see an increased use of technology and its impact on the small business market. Although new developments will make it easier for entrepreneurs to run their businesses this year, Microsoft Store reported that nearly half of small business owners surveyed identified their top challenge as staying ahead of rapid changes in technology. Specifically, many felt unprepared to deal with cyber security threats.

Data breaches have become so commonplace that it is no longer a question of if your company will be attacked, but when. However, nearly one quarter of small businesses have not taken steps to protect their sensitive data. Those who do want to address the security of their assets will be more likely to pay for outside support than do it themselves. Some IT experts also expect to see an increased investment in dedicated security operations centers as part of a shift away from prevention towards a proactive approach to detection and response.

3 – Financing: Online Lending is not for Everyone

The stock market’s positive performance, dropping unemployment, and relatively low fuel prices were some of the bright spots of 2017, along with an easing of the credit crunch that has made it difficult for small businesses to borrow the funds they need to grow.

A drop in bank loan volume after the financial crisis created an opportunity for alternative lenders such as cash advance companies and online micro lenders to provide capital to businesses that otherwise could not secure credit. However, many small businesses working with these unregulated, nonbank lenders have paid a price for speed and convenience. Alternative loans often come with APRs ranging from 20 to 80 percent and considerable penalties for not meeting repayment terms. Also, some online lenders do not offer prepayment savings.

Recently there have been some bumps in the road for this category of lender. Banks and institutional lenders are expected to reclaim lost market share as the economy improves and they make better use of technology.

Summit Financial Resources bridges the gap between easy, but expensive financing and lower-cost, harder-to-get loans. We offer working capital loans for small to medium-sized businesses that involve using your accounts receivable and other assets as collateral. With a variety of product options, including invoice factoring, asset-based lending, inventory lending, and equipment financing, we create custom financing solutions with reasonable rates and structures that banks and other commercial finance sources cannot provide.

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4 – Marketing: Personalization is on the Rise

“Personalization” is one of the big marketing buzzwords for 2018. In the highly competitive online and social marketing space, using generic messaging or impersonal calls to action is no longer enough to convince customers to purchase. The newest trends in customization will go well beyond simply addressing an email by a person’s first name.

Many small businesses offer a variety of products or services, and their customers may benefit in different ways or for different reasons. In order to create personalized content and experiences for your various website visitors, email recipients, and social media followers, you will need to break down your target audience into groups based on existing data and user behavior.

For example, you can use one-on-one feedback to segment your emails by customer type. You might develop dedicated website landing pages for different offers and analyze your top performing pages to understand the information your audience is primarily interested in.

Paying close attention to your social media analytics will also be critical. Paid advertising on platforms like Facebook is projected to become more competitive and expensive as small businesses rapidly embrace this marketing medium. Understanding the personalities, needs, and sharing behavior of your audience will be the key to reaching your target market with a personalized approach.

5 – Expansion: Optimism Fuels Growth

The optimism expressed by entrepreneurs is expected to translate into expansion in 2018. Microsoft Store’s survey showed that among small business owners nationwide, 37.6 percent plan to introduce new products or services and 90 percent plan to hire one or two employees this year.

In addition, more companies are projected to use the Internet to their advantage, with a higher percentage of small businesses expanding into larger geographical areas. Mid-size companies are expected to leverage the use of digital payment management platforms to grow beyond international boundaries.

Embracing change is essential to keeping pace with competitors and growing your business. Success depends on adapting to this year’s business trends while not losing sight of what matters most to your customers: clear value and excellent service.

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Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.