Running a small business in 2012

Cliff Rossi, an executive-in-residence at the Robert H. Smith School of Business at the University of Maryland, advised entrepreneurs to keep an eye on consumer spending attitudes, economic policy developments and small business loans this year in a recent Washington Post article.

Going into 2012, consumers were optimistic about the economy, job prospects and buying, according to the December 2011 Consumer Sentiment Index. Recent figures from the National Federation of Independent Business found that small business optimism rose by 1.8 points for the second month running, suggesting entrepreneurs are similarly hopeful. However, as Rossi notes, "Consumers are notoriously fickle, particularly in times of great uncertainty, so (positive) estimates require some consistency before we can declare 2012 as the year of the consumer."

Companies can appeal to consumers on a budget by stepping up advertising campaigns about business promotions such as special deals or discounts.

Additionally, 2012 is a presidential election year, and small business is a hot topic given that the sector is the country's primary job creator. Although there will be a lot of discussion about ways to kickstart revenue, "the stark reality is that stimulative policy measures for small business are highly unlikely to emerge until after next year," according to Rossi.

With regard to lending in the sector, Rossi expects levels to be "on par, at best" with those of last year, when the Small Business Administration disbursed a record $30.5 billion in small business loans - a figure that's expected to shrink in 2012. Entrepreneurs may consider other sources of funding, such as bank loans, crowdfunding sites, borrowing from their own retirement funds, angel investing and venture capital.