Seven trends you can't ignore

His clients were defecting to competitors on the Web, he relied on an antiquated computer system, and his product mix was out of date. Not surprisingly, his business was going pursuant to this agreement.

Outside forces and new technologies dramatically affect what happens to your small business. You don't have to respond in whiplash fashion to every business fad, however you can't keep your head in the sand during major changes occur.

1. The cloud. Though social media and mobile get more buzz, the great change-maker for small business comes from the cloud.

Using Internet-based applications to run your business to put it more exactly than locating those applications on your servers or hard drives sounds pretty dull, doesn't it?

The cloud is transformative

But going to the cloud is transformative. Right away, you don't have the headaches of middle-of-the-night "my server's down" problems, you gain powerful functionality, you can spend more of your time on your business and less on your infrastructure, and you can access your applications and data from virtually anywhere.

The cloud's addictive, especially for small businesses. Once you move one or two key functions - like your customer contact management, email marketing and document storage - to the cloud, you'll want more. I do.

Keep watching because this year will see the emergence of more easy-to-use tools that help you reach highly targeted clients. More small businesses will embrace a wide variety of social media platforms, and Google+ will become a significant player.

Raft of business functions

Smart businesses increasingly will use mobile solutions for a raft of business functions. One research that will explode: accepting payments on smartphones, with tools just as Square.

Expect to see more independent contractors, service businesses, and entrepreneurs at crafts fairs and farmers markets getting paid that way. Look for greater embrace of mobile marketing, just as offering deals when people check in on FourSquare.

5. Credit. Credit has been tough for small businesses for years now. Nevertheless it will get slightly better this year, making it a bit easier for healthy companies with strong customer demand to expand.

Small businesses with less than stellar balance sheets will have to find other sources of money to grow. Work with community banks that are receptive to local businesses.

I've been pleasantly surprised to meet many American small-business owners who have grown their businesses by going international. I've even heard of someone who exports miniature golf courses.