Archives for February 2021

Small Business Trends You Should Follow in 2021

February 12, 2021 by Matt Carrigan Leave a Comment

Wondering which small business trends in 2021 will be the most impactful?

2020 was a difficult year for many small businesses. Between a global pandemic, economic recession, and social upheavals, many small businesses were forced to pivot and adapt in order to survive.

Despite the many shakeups and challenges, some common trends have emerged. As economic activity is positioned to recover throughout 2021, small businesses need to be prepared if they’re going to capitalize on new opportunities to secure their position for long term success.

Small Business Trends You Can Follow in 2021

By staying on top of the most important small business trends in 2021, your business will be able to attract new audiences, enhance productivity, and ultimately boost revenue.

Remote Work

Companies have been implementing work from home policies for years. While remote work is nothing new, the global pandemic of 2020 has pushed it into the mainstream as one of the most prominent small business trends for 2021.

In 2020, a report by Stanford University found that an estimated 42% of the American workforce consisted of full-time remote workers. Going forward, many business experts expect this trend to become even more prevalent. By 2025, an estimated 70% of the workforce will be working from home at least 5 days a month.

Technologies like Zoom and Google Chat have made it possible for employees to work remotely. In many cases, remote employees maintained the same levels of productivity, or greater, than when they were at the office. In fact, one study found that 94% percent of 800 employers surveyed believed productivity was the same or higher when staff was working remotely.

Remote work also brings a host of other benefits, including greater employee satisfaction, more flexibility, and fewer costs resulting from downsizing office space.

Small businesses can use the money they save to focus on growth, like investing in digital marketing or pursuing other goals.

Generation Z Becomes the Target Customer

While many companies are still focused on attracting millennials, one of the biggest small business trends in 2021 will be targeting Generation Z.

Estimates suggest that in 2020, Gen Z—or individuals born between 1997 and 2012—made up 40% of all consumers in the United States.

Gen Z is characterized by having little to no memory of a world before the internet. They are also in line to be the most ethnically diverse and educated generation as of yet.

As consumers, Gen Z expects convenience and seeks individual expression through the brands they choose. They also view consumption as an ethical matter—and tend to align with brands that share their values.

Businesses that want to capitalize on long term growth should focus on targeting Gen Z consumers. Investing in digital marketing, defining company values, and focusing on building relationships can position your business to capture this growing market.

Digital Marketing & Search Engine Optimization

How is your small business getting leads or new customers? To prevent falling behind the competition, marketing experts agree that small businesses need to capitalize on digital marketing campaigns sooner rather than later. This includes social media, and search engine optimization channels (SEO), along with a host of other channels.

Digital marketing is a wide umbrella that takes into account any internet-based marketing strategy – including social media, SEO, mobile marketing, content marketing, and more – to allow businesses to promote brand awareness and sell products and services.

49% of internet users say they use Google to discover or find a new item or product. Incorporating SEO allows you to capture this market to drive traffic to your website, reach a wider audience, and make more sales. Incorporating local SEO is particularly critical for small businesses that can only serve customers in a specific area.

Social media and mobile marketing are especially positioned for robust growth as consumers continue to use mobile devices to search for products and services. Ensure your website is mobile-friendly, that your social media pages are up-to-date, and try incorporating Google ads.

Flexible, No-Contact Payment Methods Become a Crucial Small Business Trend

The way consumers pay for products and services is changing. No matter, what type of industry you’re in, chances are, your customers would appreciate more flexibility when it comes to the checkout process.

Nearly 2.7 trillion transactions, worth US $48 trillion, are expected to shift from cash to other payments types within the next decade. This includes credit cards, debit cards, contactless payment technologies, and mobile payments such as Apple Pay, Samsung Pay, and Google Pay.

E-wallets that store customer information, such as Amazon Pay and Paypal, are also expected to make a big impact in 2021 and beyond—especially for eCommerce merchants.

If you haven’t already, consider incorporating an online payment portal and accepting more types of payment methods. If you frequently conduct business on-the-go, wireless payment processing equipment can be especially helpful.

Increased Emphasis on Company Culture

Ensuring your company is well-positioned for success means looking beyond your revenue goals. To achieve these goals, it’s critical that your employees are engaged and motivated to contribute.

Company culture refers to your business’ internal values and the way your employees interact with each other and management teams. Company culture develops over time through the common traits shared among the people you hire.

Going forward, businesses that emphasize a positive company culture will be able to attract and retain better quality talent. In turn, they’ll accomplish more than companies that don’t.

One way you can work towards improving your company culture is by focusing on employee experiences. You can provide more benefits, opportunities for advancement, a work from home policy, or even skill training.

Encouraging open communication, non-judgement, and inclusivity can also help put employees at ease. This helps everyone feel heard, while promoting happiness and productivity.

Automation & Technology Stand Out As Small Business Trends

Many large-scale enterprises are incorporating the latest technology trends and automation features to enhance their front and back offices. Small business owners should also take note.

No matter the size of your business, automation tools can help you streamline operations, save time, cut costs, and boost productivity. That’s why automation and technology are expected to be one of the most important small business trends in 2021.

Customer relationship management (CRMs) and other software systems allow you to accomplish a number of things, like:

Optimize customer data
Manage inventory
Improve scheduling
Automate tasks
Offer customer support
Enhance marketing efforts

And more.

Many businesses are especially capitalizing on customer service automation tools, such as chatbots. Chatbots are an affordable way to enhance customer service and the user experience. By incorporating a chatbot onto your website, people will be able to ask questions and even receive personalized recommendations.

Used strategically, chatbots can turn a site visitor into a customer without any involvement from your team.

eCommerce Industry Booms as Retail Suffers

Amid the coronavirus pandemic and state-wide lockdown orders, brick and mortar stores faced numerous challenges throughout 2020. As a result, many retail stores pivoted towards eCommerce where they found enormous potential.

According to Digital Commerce 360, online consumer spending grew 44% year-over-year in 2020, reaching a total of $861 billion in online sales.

Many online shoppers in 2020 were first-time digital buyers, which suggests a shift in consumer behavior towards eCommerce. Even as COVID-19 subsides, this trend is likely to remain.

eCommerce can be a great way for retail businesses to explore new revenue channels and sell directly to consumers. There are also plenty of opportunities for businesses in other industries to expand into online sales.

If you haven’t already, consider ways to incorporate online sales into your business plan. You could start by accepting payments for existing products and services through an online portal on your site.

Social Responsibility, Brand Values & Transparency

One of the biggest small business trends in 2021 is the emphasis on social responsibility, brand values, and transparency. According to the Harvard business review, 65% of consumers want to shop from purpose-driven brands.

Different businesses will have various values, but many are increasingly incorporating some form of social justice, environmental, or philanthropic focus. Consumers are also growing more concerned with privacy issues and protecting their personal information.

You should always consider your consumer base as you build out your company values and social responsibility objectives. In the meantime, these strategies can be a good place to start.

Make your values and mission clear
Make your privacy policy clear to customers
Find charity organizations to support
Hold fundraisers
Encourage volunteering
Hire minority groups
Reduce wasteful packaging
Incorporate biodegradable packaging
Work with fair-trade organizations
Source locally

How to Capitalize on Small Business Trends in 2021

How can your small business gain an edge? By adapting to changing consumer trends, you’ll ensure your business stays ahead of the competition when it matters most.

Even though some businesses are still on hold due to the pandemic, it’s important not to fall asleep at the wheel. The smartest business owners are taking this time to re-evaluate and push forward, rather than fall behind.

Whether you plan to introduce a social responsibility initiative, target Gen Z consumers, invest in digital marketing, or incorporate more automation tools—you’re going to need some extra cash on hand.

National Business Capital helps businesses obtain the financing solutions they need to boost sales and reach the next level.

Whether it’s a business line of credit or small business loan, our expert Business Financing Advisors can help you get funds that catapult your business towards long term gains.

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National Business Capital & Services is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.

Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services.

We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!

About the Author, Matt Carrigan

Matt Carrigan is the Content Writer at National Business Capital & Services. He loves spending every day creating content to educate business owners across every industry about business growth strategies, and how they can access the funding they need!

Money Supply Drives Stock Market Performance

February 10, 2021 by Channelchek 1 Comment

Money Supply is Like Caffeine for Stocks

The growth of money supply over the past year is beyond comparison to any other point in history. Change in money in circulation has a fairly predictable impact on many areas of the economy. When it grows above the pace of the economy it impacts prices. This includes asset prices such as stocks and real estate. The impact on financial assets that provide income such as bonds is most often negative. Investors should be well-versed on the impact increased money in the economy has on investments.

Money Supply

“Money Supply” refers to the amount of money in circulation. This could include everything from physical currency, the amount of unused revolving credit, and short-term deposits such as checking and longer-term deposits in CDs. Money supply in effect is a measure of the purchasing power of a population. The economic law of supply and demand, says, the higher the money supply (easy money), the more difficult it is for the currency to retain its value. When any currency loses its value, it takes more of it to buy goods, services, even investments. The number of dollars it takes to buy something is inflated.

The growth can be shown to be directly correlated to increases in stock market valuation. When there is a greater amount of money available, there is more money to be put in stocks. Anecdotally, we saw an impact on stock prices each time a new stimulus check was approved (forward-looking investors) and again after they hit people’s accounts. The reason is basic; more money in circulation, with a roughly unchanged supply of equity to be owned, results in pushing the value of the equity up.

In the past year, money supply as measured by the widely quoted M2 data (cash, checking deposits, and easily convertible “near money”) are striking. As a reference, the money supply surge in 2020 exceeded any in the one-and-a-half centuries for which there is data. Between March and November, the measure of M2, jumped 24%. The steep rise has flattened a bit, but growth remains rampant into 2021.

Inflation

As prices move up (inflation), investors demand a higher return on their investments to make up for the erosion in purchasing power of their money. They reduce their investments in interest-bearing securities such as bonds until the yield reaches their future inflation expectations, plus some additional level of protection. Bond investors are particularly cautious because higher interest rates reduce the value of their comparatively lower yielding portfolio. This disincentive to invest in bonds, or lend in other ways, motivates more people to move more money into stocks. The trend that occurs with investors moving out of bonds and chasing superior equity returns, can become self-fulfilling. The more stocks rise and bonds fall, the more investors allocate their portfolio to include more equities. They are chasing return and it may snowball for them.

Stock Prices

Visually, the trend in Money Supply growth is shown below to coincide with the trend in stock market returns. As more activity and money flows into a market, that market naturally has a positive upward trend. Because of this, market analysts keep an eye on big changes in money as an indicator of the way the stock market will behave in the near future.

Money Supply (M2) Trend compared to Stocks (Nasdaq 100) trend since 2016. M2 has a smooth line as money in circulation has few bumps or dips. The trajectory over most time periods is mostly equivalent.

Take-Away

The growth trend of the overall ability to spend throughout the economy has been growing at rates not seen since the 1970s. That decade was known for its struggle to tame price increases. The annual inflation rate (CPI-U) measured in December 2020 was 1.4%. During the year inflation reached a high of 2.5%, in January and a low of 0.1 in May. The Fed forecasts a 2% CPI-U growth rate for 2021. Their open market operations, which include buying bonds and bond ETFs are ongoing. This injects money, directly into the system, and into the hands of investors (sellers). There are many factors impacting stock prices, this is one of those factors that is positive for equities.

Suggested Reading:

Class Action Law suite against Robinhood.

Short Sellers vs Gamestop Buyers

Sources:

U.S. Inflation – CPI

Higher Inflation is Coming and it Will Hit Bondholders

Class Action Lawsuit Against Robinhood

February 1, 2021 by Channelchek Leave a Comment

Understanding the Robinhood Class Action Lawsuit

No Fluff- Just Facts

On Thursday a class action lawsuit was filed against Robinhood, the stock-trading and investing firm, in a New York federal court.

On Wednesday Robinhood unilaterally removed certain stocks from its trading platform, among them Gamestop (“GME”). The removal prevented Robinhood customers from buying, selling, or even searching for GME on the Robinhood app.

The lawsuit alleges that “Robinhood breached its Customer Agreement by…failing to disclose that its platform was going to randomly pull a profitable stock from its platform…” Also alleged is that Robinhood violated Financial Industry Regulatory Authority (“FINRA”) Rule 5310.01 by “failing to respond at all to customers’ placing timely trades — and outright blocking customers from trading a security.” Rule 5310.01 requires that investing firms “must make every effort to execute a marketable customer order that it receives promptly and fully.”

The class action Complaint is comprised of four “Causes of Action”: (I) Breach of Contract; (II) Breach of the Implied Covenant of Good Faith and Fair Dealing; (III) Negligence; and (IV) Breach of Fiduciary Duty and was lodged against Robinhood Financial LLC, Robinhood Securities, LLC, and Robinhood Markets, Inc. (collectively “Robinhood”). The “Relief” sought is also in four parts: (1) damages for class members’ ongoing losses incurred by their inability to sell GME on Robinhood’s platform; (2) attorney’s fees and costs; (3) punitive damages, and (4) an immediate injunction requiring Robinhood to reinstate GME on its trading platform.

The injunction request was mooted on Friday with GME’s reinstatement to Robinhood’s platform and resumption of customers’ unfettered ability to trade it.

Although Thursday’s lawsuit was filed in the United States District Court for the Southern District of New York by Attorney Alexander Cabeceiras, it was filed in the name of class member representative, Brendon Nelson, from Massachusetts. Alleged is that aggregate claims exceed five million dollars in damages, exclusive of attorney’s fees and costs, and that there are more than 100 putative members. A jury trial has been requested. The case has been assigned to United States District Judge Jesse M. Furman.

“DoNotPay,” an app previously marketed as a “streamlined” way for consumers to “get refunds and cancel subscriptions,” expanded its services on Thursday to add a feature allowing users to apply to join the New York lawsuit against Robinhood. DoNotPay charges an annual fee of $36.00 to access its app. DoNotPay is not the only way to join the New York class action.

Other lawsuits against Robinhood may follow, and a second class action lawsuit is currently being organized by the law firm ChapmanAlbin, LLC, based in Cleveland, Ohio.

The filing of multiple lawsuits – including multiple class actions – against the same defendant involving the same subject matter is not uncommon in the United States, and is neither prohibited nor illegal. Given the nationwide expanse of its customer base, Robinhood could be sued in any state or federal court (its exposure outside the U.S. is beyond the scope of this article). Multiple lawsuits by the same person against the same defendant over the same subject matter, however, are essentially prohibited, and would thus preclude Robinhood consumers from joining more than one lawsuit.

When substantially identical suits are filed in competing federal courts, the “first-to-file” or “first-filed” rule is often applied. The “rule” is not an actual, statutory rule, but a longstanding doctrine of comity whereby a federal court in which a substantially identical action is filed has discretion to stay, dismiss, or transfer the second-filed case in deference to the first-filed case. While the authority of a federal court to dictate what another federal court cannot due is unsettled, its authority over a state-filed action usually goes unchallenged.

If another lawsuit was initiated against Robinhood in any state court, the matter could (and would likely) be immediately removed (kicked up) by Robinhood to federal court.

Competing federal class actions presents a variety of challenges and options for Robinhood. There is no one-size-fits-all approach. One option is for Robinhood to separately defend each action, triggering res judicata (Latin for “thing decided”) and claim preclusion principles borne from the Full Faith and Credit Clause of the United States Constitution, and thus a race-to-the-finish scenario: the first action to reach judgment on the merits, whether that be by settlement or through litigation (i.e., disposal by way of a court’s ruling on a motion to dismiss or summary judgment, or by way of a jury trial), is generally conclusive as to all class members despite any competing litigation that is still pending. Whether the first judgment wholly precludes or halts another lawsuit depends on the overlap between the claims asserted and the classes (the more overlap between the two, the more impactful the judgment and vice versa).

Within the race-to-the-finish is the race-for-class-certification. Rule 23 of the Federal Rules of Civil Procedure dictates whether a federal class action may be “certified” and thus even permitted to go forward. Certification is not automatic nor is it “a given.” Rule 23 states that “[a]t an early practicable time after a person sues…as a class representative, the court must determine by order whether to certify the action as a class action.” Proving that Rule 23’s requirements have been satisfied can be tedious, costly, and time-consuming. Consequently, “at an early practicable time” can mean the class certification ruling is stayed or held in abeyance while the court instead rules on a motion which is outcome determinative (dispositive) to the case substantively, such as a motion to dismiss or motion for summary judgment.

Robinhood’s response to any lawsuit, regardless of where that lawsuit is filed, will likely be a dispositive motion based upon the terms and conditions contained in its 33-page, singled-spaced “Customer Agreement” last updated June 2020. To use Robinhood’s free app and gain access to the Robinhood trading platform, customers must enter the Customer Agreement and agree to those terms and conditions.

Germane to the NY lawsuit allegations is Paragraph 16, “Restrictions on Trading,” which states: “I understand that Robinhood may at any time, at its sole discretion and without prior notice to Me: (i) prohibit or restrict My access to the use of the App or the Website or related services and My ability to trade, (ii) refuse to accept any of My transactions, (iii) refuse to execute any of My transactions, or (iv) terminate My Account.”

Also germane is Paragraph 38, “Arbitration,” which states: “This Agreement contains a pre-dispute arbitration clause…by signing…the parties agree [that] [a]ll parties to this Agreement are giving up the right to sue each other in court, including the right to trial by jury…“

The preclusive effect of a settlement creates an incentive among competing class counsel to be the first to reach a settlement. Authority to reach a settlement on behalf of class members depends on whether an order of class certification has been obtained. A defendant facing or potentially facing numerous class actions, such as Robinhood, has incentive and implied bargaining leverage with whichever counsel it chooses to negotiate as the first deal cut may be binding on all Robinhood consumers, yet leave counsel for the non-deal-making class out entirely.

About the Author:

Denese Venza, Esq. is an attorney and freelance writer licensed to practice in both state and federal courts in Florida and West Virginia. The information contained in this article is provided for informational purposes only, is not legal advice, and should not be construed as legal advice on any subject matter.

Suggested Reading:

Short-Sellers vs GameStop Buyers

Will Robinhood be Fined on Charges of Gamification?

Can Small Investors Compete With Wall Street?