At SmallBusiness.com, we purposefully do not report news related to startups who are raising millions of dollars. Nothing against them, but they get plenty of coverage without our help. However, one startup segment embraced early by Main Street small businesses is food-delivery services. (It shouldn’t be surprising as pizza delivery helped create the concept decades ago.) Food delivery services show no sign of slowing, according to Steve King, a partner at Emergent Research and a regular contributor to SmallBusiness.com who shared with us the following:

By Steve King | During the past two weeks, delivery services DoorDash and London-based Deliveroo announced substantial funding rounds. 

$575 Million | Amazon is leading a $575 million funding round in the UK-based Deliveroo. If you aren’t familiar with the company, it operates in 14 countries and has 60,000 couriers that deliver from 80,000 restaurants globally. The current round of funding raises the company’s valuation to $1.53 billion.

$13 Billion | DoorDash is raising $400 million at a $13 billion valuation (up from a $7.1 billion valuation in February.

There are two key reasons food delivery is considered a big opportunity that is attracting these investments.

First, the potential is huge and the market is rapidly growing. Key stats from Manhattan Venture’s research report on Postmates (PDF), yet another food delivery company:

$30 billion | Estimated current U.S. food delivery market, 2019
$365 billion | Estimated value of U.S. food delivery market in 2030
5% – 10% | Fraction of restaurant sales that are currently delivered
20% | Fraction of restaurant sales set to grow to 20%

Second, investors believe food delivery business models can be profitable. (Based on the financial performance of the publicly traded Grub Hub.)

This marks Amazon’s renewed interest in this space. Amazon Restaurants pulled out of the U.K. last year and is only available in a limited number of U.S. cities. It is worth watching. It’s clear they see the delivery of anything and everything as being their target market.

But the consensus among investors so far is this: Food delivery is a big enough market with room for multiple players to be successful. 

And with the growth of delivery services, new markets will continue to open up to the small and local food stores and restaurants who market to those who’d prefer to stay home for dinner tonight

Jack Taylor / Stringer / GettyNews

Self-employed small business owners are struggling to grow their business amid fierce competition and a lack of time or money to invest in their business, according to a survey released by QuickBooks Self-Employed. However, despite such challenges, 78 percent of these small business owners say it’s a good time for other people to start a business.

Here are some of the findings of the national survey of 753 self-employed small business owners.

The economy

66% | Percentage of self-employed small business owners who say they feel financially insecure
60% | Believe the economy is good
47% | Are concerned about the negative impact a recession would have on their business

Competition

85% | Percentage of self-employed small business owners who say they are experiencing more competition now than ever before
71% | Say competition is affecting their business

Optimism

78% | Percentage of self-employed small business owners who say it’s a good time for other people to start a business

Challenges

14% | Percentage of self-employed small business owners who say they work more than 50 hours per week
27% | Say their business is currently growing above a steady rate
13% | Say they consistently meet their growth goals
31% | Blame a lack of money as their biggest challenge to growth

GettyImages

The prices small businesses sold for during the third quarter of 2018 reached record highs, according to the 2018 third-quarter Insight Report from BizBuySell.com, the online business-for-sale marketplace. The record sale prices are related to stronger business financials which also hit new levels in Q-3″ according to Bob House, president of BizBuySell.com. “With buyers able to offset increasing prices by acquiring healthier businesses, the result is a well-balanced market. To be in a place where both buyers and sellers are able to capitalize without the other party losing out is fantastic and a testament to the strong will of entrepreneurs.”

$249,000 | Median sales price of a small business during Q-3, 2018
10.7% | Percentage growth of median sales price (year-over-year) (Highest increase since BizBuySell started collecting data in 2007)

Buyers are purchasing businesses with better financial footings

$530,995 (up 7.4% year-over-year) | Median revenue
$116,229 (up 2.8% year-over-year) | Median cash flow

Tariffs and elections take center stage as market aims to continue record pace

Even as small business asking prices have continued to rise, buyer demand has not swayed thanks to the attractive financials absorbed in an acquisition. However, as witnessed during the Great Recession, small business success is greatly tied to the performance of the overall economy.

30%  | Percentage of owners who say they will be negatively affected by the tariffs.
76% |  Percentage of owners who approve the tariffs (including half of those believed to be negatively impacted)

30% | Percentage of buyers who approve the tariffs
23% | Percentage of buyers who said if tariffs remain in place, they would be less likely to purchase a small business

90% | Percent of Republican business owners who support the tariffs
27% | Percent of Democratic business owners who support the tariffs

“We’ve now had a few record-breaking years in a row in terms of transactions and it appears 2018 will be no different,” said BizBuySell.com’s House. “The fact that small businesses are selling for the highest price to date and demand hasn’t slowed shows how much confidence both sides have in today’s market.”

Charts | BizBuySell.com Photo | GettyImages

]]> https://smallbusiness.com/trends/niche-coworking-spaces/ Mon, 16 Jul 2018 19:19:27 +0000 https://smallbusiness.com/?p=32233

An article recently appearing in the New York Times examines Spacious, a startup that transforms unused space – especially restaurants between mealtimes – into shared workspaces. Here is a look at this trend from Steve King, partner in Emergent Research and a regular contributor to SmallBusiness.com on topics related to changing work trends impacting small businesses, including the on-demand (gig) economy and the evolution of co-working space.

---

 

The company Spacious is helping businesses turn downtime into co-working space time. A co-working space/spa in Kansas City is another example of how empty space and time can be turned into revenue-generating opportunities — and even more creative ideas about what co-working space can be.

---

New York Times key quote:

“Everything is now a co-working space, one of those shared offices that are popular among freelancers, small companies and other workers who want a change of scenery. Coffee shops are co-working spaces. Gyms are co-working spaces. Social clubs are co-working spaces. And now restaurants — but only before dinnertime.”

This is another example of shared workspaces expanding into a wide range of specialized niches.

We’ve long covered this trend, with our most favorite recent example being a combo coworking space and spa in Kansas City. Allwork’s “Generalisation Will Get You in Trouble: The Case for Niche Workspaces,” also covers this trend and points out a variety of specialist shared workspaces.

Key quote:

 “With hundreds of new spaces opening every month, independent operators are urged to focus on a particular customer segment”

Interestingly, drop by workspaces such as restaurants don’t meet Emergent Research’s definition of a coworking space. This is because they don’t offer activities and facilitation that encourage networking and community.

---

But these new approaches are still very useful places to work that also reduce social isolation and loneliness. And while these spaces may not provide support for networking, it still happens naturally.

The trends driving the growth of niche and specialized workspaces – technology enabling distributed work, more people working outside of traditional offices, the blending of work and life, etc. – continue to strengthen.

Which means more spaces will become shared workspaces.

---

Photos | Spacious.com

]]> https://smallbusiness.com/about-small-businesses/buy-sell-small-business/ Tue, 10 Jul 2018 17:18:15 +0000 https://smallbusiness.com/?p=32190

The online business-for-sale marketplace BizBuySell.com reported today (July 10, 2018) that a record number of small businesses changed hands in the first half of 2018.

5,383 | Number of businesses reported sold in the first two quarters of 2018 (on pace to surpass 2017’s record-high of 9,919 transactions)

2,705 | Number of businesses that changed hands in Q2, an increase of 6.7% over the same time last year (most of any quarter since BizBuySell began tracking data in 2007)

$526,048 | Median revenue of businesses sold in the second quarter reached (7.5% increase from 2017, a record high)

+$260,000 | Asking price increase (4%) over last year

---

 

 

Closed Small Business Transactions (2015-2018 trend)

 

Small Business Sale Price vs. Asking Price (2015-2018 Trend)

 

Small Business Sold by Business Sector (Q2, 2018)

 

---

Indicators point to continued strong pace in second half of 2018, however…

According to BizBuySell.com, the rising financial performance of small businesses and the influx of sellers ready to enter the market provide for an optimistic outlook of the rest of 2018. Sellers will continue to take advantage of high sale prices and buyers will be able to find quality businesses within the large supply of listings.

Despite the favorable setup, BizBuySell says “external factors exist that could sway the trajectory of the market.”

• It remains to be seen what impact changes to the U.S. immigration policy will have on the market over the long term.
• Same goes for the U.S.-China trade war, where tariffs could have a direct effect on small businesses.

However, on the upside

• Tax Cuts and Jobs Act passed in 2017 could cause the number of business transactions to further spike. Under the new tax law, many owners now benefit from a 20 percent deduction for qualified business income. If owners choose to reinvest those savings back into their business as early data suggests, the end result could be an increasing number of attractive businesses hitting the market.

“Our survey indicated 32 percent of all current small business owners plan to sell in the next two years so this trend will likely continue well into the future,” BizBuzSell.com’s CEO Bob House said. “It will be particularly interesting to watch the demographics of an average small business owner change and how this younger generation’s new ideas will push forward an already successful small business environment.”

GettyImages
Charts | BizBuySale.com

]]> https://smallbusiness.com/economy/vermont-remote-worker-incentive/ Wed, 06 Jun 2018 02:25:32 +0000 https://smallbusiness.com/?p=31893

We’ve all seen how state and local governments often throw huge amounts of money at large corporations that will agree to move their headquarters or a factory to a city or state. Amazon.com has even turned such a decision-making process into a year-long media event during which some states bid billions for a second headquarters of the company.

---

But what about small states that don’t have the resources to incentives necessary to compete for such large enterprises? Vermont thinks it has a better idea.

To help address the state’s rapidly shrinking tax base, Vermont is attempting a new spin on the conventional industrial planning approach: It is paying people who currently work remotely for non-Vermont employers relocation expenses of $10,000 over two years if they will move to Vermont.

Why is Vermont willing to pay relocation expenses for remote workers who will move to the state?

• The state has a rapidly shrinking tax base
• Vermont is aging faster than the rest of the U.S. population
• Remote workers can work from any location and Vermont is a beautiful place to live

You better act quickly, however

• The first-come, first-served remote worker grants are only available to new residents who relocate on or after Jan. 1, 2019.
• Vermont has budgeted grants for about 100 new remote workers in the first three years of the program and about 20 additional workers per year for every year after.

Perhaps, there’s a better way to attract more remote workers — and small business owners along Main Street

We’re big fans of Vermont. Four seasons a year. Heck, even one of our favorite small business movies was set in Vermont, Baby Boom.

But we think a plan that attracts only 300 workers over three years may not be the solution you’re looking for. Again, we love you Vermont, but if you want to get your economy bustling, you’ll probably find the answer in the chart below.

Overall Tax Burden by State (Top Ten Most Burdensome)
Source: WalletHub

Total Tax Burden (1=Highest)	State	Total Tax Burden (%)	Property Tax Burden (%)	Individual Income Tax Burden (%)	Total Sales & Excise Tax Burden (%)
1	New York	13.04%	4.62%	4.78%	3.64%
2	Hawaii	11.57%	2.20%	2.85%	6.52%
3	Maine	11.02%	4.80%	2.69%	3.53%
4	Vermont	10.94%	5.20%	2.32%	3.42%
5	Minnesota	10.37%	3.00%	3.70%	3.67%
6	Connecticut	10.19%	4.17%	3.34%	2.68%
7	Rhode Island	10.14%	4.70%	2.31%	3.13%
8	Illinois	10.08%	4.11%	2.44%	3.53%
9	New Jersey	10.02%	5.12%	2.46%	2.44%
10	California	9.57%	2.66%	3.65%	3.26%

---

 

]]> https://smallbusiness.com/trends/craft-brewing-leads-the-way-to-a-new-artisan-economy/ Thu, 08 Mar 2018 12:42:08 +0000 https://smallbusiness.com/?p=31097

---

At SmallBusiness.com, we’ve long been fascinated with the growth of craft breweries and what other craft industries can learn from their success. Observing their steady growth, major news and business media are beginning to ask the same questions we’ve been asking. Steve King, a partner at Emergent Research  and contributor to SmallBusiness.com, has been following the growth of The New Artisan economy for over a decade so the trend is not surprising to him, as he explains in this analysis.

---

There have been a number of recent articles pointing out that despite having to compete with several giant beer companies, the craft brewing industry has dramatically expanded over the past decade.  Such articles make the point that craft brewing may be a model that spreads to other industries, creating new artisan businesses and middle-class jobs.

The Atlantic |  Craft Beer Is the Strangest, Happiest Economic Story in America,
Bloomberg |  Craft Brewing as a Model for Helping the Middle Class,
The Economist |  Crafting a Life
New York Times |  How Craft Breweries Are Helping to Revive Local Economies

It is certainly true that artisan businesses can be job creators. As the chart below from The Atlantic shows, brewing jobs have taken off thanks to the craft brewing boom. And these have been good jobs:

• Craft jobs typically pay decent wages
• Workers have consistent schedules
• The jobs generally come with benefits

---

Three broad trends of the New Artisan Economy

In the work Emergent Research has done for Intuit during the past decade on the New Artisan Economy, we have observed these trends:

Demand | A growing base of customers looking for unique, unusual, personalized or locally produced products.

Online Marketing | The internet has made it much easier to find or be found by people interested in buying niche products.

Technology | New technology is lowering the cost of serving niche markets and making artisans able to compete with even the largest of firms.

Quote from the Emergent Research 2008 paper, “Intuit Future of Small Business Report“:

“The new generation of artisans will be amplified versions of their medieval counterparts. They’ll be equipped with advanced technology, able to access global and local business partners and customers and be capable of competing in any industry. Their firms will agile, flexible and often partner with larger firms to accomplish their business goals. Most will be knowledge artisans, relying on human capital to solve complex problems and develop new ideas, products, services and business models. These artisan firms will attract and retain highly skilled and creative talent by offering freedom and flexibility and, in many cases, highly competitive compensation.”

---

Other craft business segments are doing well

The U.S. National League of Cities has called artisan makers the future of small manufacturing and have urged cities to create programs to support them due to their positive economic impact.Other successful artisan business sectors, including crafts, fashion, distilled spirits, and a wide variety of food products.

 

---

 

The San Diego Union-Tribune recently reported that the CEO of Ace Parking, one of the largest national parking operators, had shared in an email that demand for parking at hotels in San Diego has dropped by up to 10 percent, restaurant parking demand is down 25 percent while demand for valet parking has dropped by 50 percent. No, the population of San Diego isn’t falling. Far from it. According to the Ace executive, the falling usage of parking is due to the growing popularity of car-sharing services like Uber and Lyft. Another contributing factor could be the increase in the construction of more and more apartments and condos in the downtown area of the city, creating a denser population who can walk to places they previously drove to.

The app-enabled ride-sharing innovation is an example of “disruptive innovation.” In this case, the disruption can be viewed as positive (if you are in need of a taxi in New York City, for example) or negative (if you own or drive a New York cab that had heretofore been a monopoly).

Recently Steve King, a partner in Emergent Research and a regular contributor to SmallBusiness.com, wrote an article for Harvard Business Review, Coworking Is Not About Workspace — It’s About Feeling Less Lonely. It covers the research Emergent has conducted relating to the social and professional sides of coworking space membership. From Steve, here is a roundup of some of Emergent’s key survey findings that relate to coworking space.

Research related to the interpersonal or social aspects of co-working

87% | Percentage of coworking space members who say they’ve met other members of their co-working space for social reasons
54% | Socialize with other members after work and/or on weekends
79% | Say coworking has expanded their social networks
83% | Say they are less lonely since joining a coworking space
89% | Say they are happier since joining a coworking space

But coworking space membership is not just about being more social. Emergent’s research also shows significant business and professional benefits accrue to coworking members:

82% | Say coworking has expanded their professional networks
80% | Say they have turned to other coworking members for help or guidance
64% | Say their coworking networking was an important source of work and business referrals
84% | Say that working in a coworking space improved their work engagement and motivation

The bottom line from our research – and the research of others – is that there are very clear social benefits from belonging to a coworking space. This is especially true for those who work on their own. And given the concerns related a growing “loneliness epidemic” and its impact on those working remotely or alone, these are important findings.

Read the entire Harvard Business Review article here.

istock