Innovating in times of a high unemployment rate

unemployment rate

The past 4 or 5 years, we lived through a period in the US when we were basically at full employment, that is, everyone who was able and willing to work could find a job and small business trends were only growing. With rates below 4%, it was the end of an economic cycle that started after the 2008 crisis, where workers faced a rate above 10%.

But nothing compares to the national unemployment rate of 14.7% of April 2020, showing the terrible impact of the coronavirus on the lives of Americans, especially for those who live paycheck to paycheck. With a labor force participation rate of 60.2%, the lowest since the 70’s, there are many people without steady income, and for your business it means less consumer spending.

Here, we want to look at two different scenarios that may be impacting your life. The first, if you’re a resilient small business owner going through temporary hard times, is how to adapt your business model and social media marketing strategy to get to the other side of this crisis. The second is how to become an entrepreneur if you’re out of a job and the sector you have experience will have a slower recovery.

 

Experiment when the unemployment rate is high

Usually, when you are implementing something new to your business, it takes a long time to design the process, study the impacts, analyze data intelligence, create a minimum viable product or service, and slowly deploy it to customers. In times like these, with a double-digit unemployment rate, you must be faster. Especially as an SMB, you can skip some steps to get the new offering to market in a shorter time (of course, you MUST focus on safety right now, so this item cannot be overlooked).

So, for example, if you have a local small business that sells running apparel, and most events have been canceled, which impacts your bottom line, this is the perfect time to create content that helps amateur runners to stay fit at home and start offering some exercise equipment that your customers can buy online (if you don’t have an ecommerce ready, these sales can happen through Instagram or Facebook). Start with a small inventory and start recording some videos, don’t overthink it, as your potential consumers are starving for new content.

If you have a bar and you’ve seen a drop in customer traffic whether due to government orders or people are still afraid of leaving their homes, remember that alcohol consumption has grown during quarantine. You can order some plastic growlers and start selling your craft beer options online. In addition to going through perishable items and avoiding losses, you can offer something different that customers are missing, drinking tap beer instead of canned beer.

 

Do your market research

One of the main pillars of our service is analyzing market trends and customizing them based on the reality of our customers. There is so much information and so many ideas out there that can help your small business. In such a polarized environment, use this time to get away from politics a little and switch your attention to economic content. If you prefer TV, follow CNBC or Bloomberg; if you’d rather consumer audio content, there are great economy podcasts from Marketplace and NPR. And if you like reading, how about a subscription to The Economist that can give you a global view of the market?

Look for stories that highlight small businesses that found out-of-the-box solutions to reinvent their companies. We have seen cut flower growers that saw their supply chain dismantled, switching from bulk sales to large supermarket chains to more profitable direct-to-consumers models through e-commerce and local delivery.

Another great advantage of doing this research is being up to date on safety and health requirements for your workers, so you can ensure compliance and understand what PPE you must purchase. Interviews with customers and small business owners can show consumer confidence levels and give you tips on changes you can make based on their behavior.

 

The power of community

Innovation does not necessarily mean high-end technology. You can innovate on how you interact with other business owners and with local consumers. Why not create a small business assistance group with other entrepreneurs in your segment so you can brainstorm ideas to attract more consumers? It is important to remain competitive but thinking as a sector can be beneficial for everyone.

Connecting to your local consumers using surveys, virtual events, live videos, focused content, etc., is another way to understand how consumers are feeling and showing them that your business will help them get through these times. Because with high unemployment rates and less disposable income, they may not be ready to spend now but will remember you when the economic recovery reaches their household.

 

The Number: 14.7%

The Action: Be bold. Be agile. You may not have the deep pockets of large corporations, but you have the flexibility of changing gears faster. Decide your initial priority and implement a basic model to get it up and running in less than a week. Then, adjust it according to feedback and keep moving forward.

 

Did you enjoy this article on the unemployment rate? Check out our blog for more tips focused on small businesses.

4 Comments

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