What will the New Year hold for small businesses? Here are five predictions.

Small businesses were in growth mode in 2013 and more of the same is expected in the New Year. But from a funding perspective, small business owners are going to have to be creative to get much needed money to invest in marketing, which is predicted to be a top outlay for 2014.

“The environment for small businesses have been pretty challenging since the economic downturn. Banks have been reluctant to lend,” says Dan DeMeo, CEO of CAN Capital, which provides funding to small businesses. As a result, in 2014 there will be a growing need and understanding of alternative funding, he says.

Alternative funding

One of those alternative funding methods, and one that Hunter Hoffmann, head of US communications at Hiscox, predicts will grow in popularity is crowdfunding. Crowdfunding happens when a group of people donate small amounts of money to a company, cause or person. 

“The JOBS Act allows crowds of investors to not only donate money, but actually invest in small businesses via traditional equity models,” says Hoffmann. “Earlier this year, the SEC approved a portion of the Act that allows startups to advertise for investors.”

Marketing and branding

In addition to finding alternative ways to get capital, small businesses are expected to focus on marketing and branding in 2014, according to a survey from Rocket Lawyer, the legal Website.

“Small business owners view marketing and branding initiatives as the top priority, trumping raising funds, developing new products or services, hiring, or international expansion,” according to Rocket Lawyer’s release. More than 40% of survey respondents said they are focused on increasing their marketing presence while more than a quarter said raising funds was their main concern.

One area of marketing that will be a big focus for large enterprises and eventually their smaller brethren is the integration of the physical and digital experience for customers.  According to Chuck Fried, president and chief executive of TxMQ Inc., a technology staffing company, customers will increasingly want the business to know that they looked at a particular product the night before when they walk into the physical store the next day.

“We’re beginning to see the recognition among smaller enterprises and larger ones that they’ve got to seamlessly integrate the experience for the consumer,” says Fried. “This year we will see more of the IT investments [that] companies make being controlled by the marketing department.”

Tech troubles

Some small businesses could run into some technology trouble in 2014, especially if they haven’t prepared for the end of Microsoft support for Windows XP.

“The end of Microsoft support for Windows XP on April 8th, 2014, will immediately be followed by a rash of virus attacks as systems that no longer receive security patches are targeted,” says Nick Pegley, vice president of marketing at All Covered IT Services from Konica Minolta. “Businesses still on XP need to be transitioning to Windows 7 or 8 starting as soon as possible.”

Mobile, mobile, mobile

According to Pegley, in the New Year the move to cloud computing will start to benefit more small businesses because they don’t have to spend money on expensive servers and can instead pay monthly on a need-to-use basis. Pegley also predicts the rate of adoption for tablets by small businesses will pick up speed in 2014.

“For the first time, many small businesses will buy more tablets than PCs,” he says. “Mobile access will become the norm, but data protection measures will need to keep up.”

Cloud insecurity

While small businesses will benefit from a cost perspective by moving to the cloud, they will also face an increased risk of breaches of customer-specific cloud assets, predicts Neohapsis, the security company. It won’t be because the cloud service is vulnerable to an attack but because of the integration, configuration and operation of it by the customer, in this case the small business.

“Cloud services can offer huge efficiency and cost advantages, however they can add operational security burden if not carefully (and knowledgably) deployed and integrated with the organization's existing systems,” says Catherine Pearce, security consultant at Neohapsis. “Just because something can be highly secure doesn’t mean that it necessarily is in the way you’re using it.”