What is the US small business future?

future of small business

There is no question that 2020 will mark a watershed for global economics. The COVID-19 pandemic has already changed consumer behavior and will require most companies to rethink their business model and social media marketing current and future strategies to adapt to this new reality and survive this initial hit before they can strive.

Small businesses generate around 44% of US GDP. While this is extremely representative, even if this group is responsible for almost two-thirds of jobs created in the country, the percentage of economic activity has decreased from 48% in 1998. If we compare the 2.5% annual growth rate of large business with the 1.4% growth for small businesses, we can see a trend that shows that mega corporations increasingly have a bigger impact, mirroring the inequality divide we have seen in income in the country.

But even with a smaller footprint, considering the volume of $ 5.9 trillion in GDP that small businesses recorded in 2014, this group would be one of the largest economies in the world.

With an unprecedented unemployment rate in the first half of 2020, with 30 million claims in 4 weeks, how can SMB’s navigate this storm and come out on the other side of this global crisis?

Social distancing as a standard

No sugarcoating here: this is not only about Amazon; for those local businesses that depend on actual consumer traffic to their brick-and-mortar stores, their entrepreneurs need to go back to the drawing board. Packed crowds are a thing of the past, at least in the short-term or mid-term future, and what was considered before as charming and cute, will now be seen as a health hazard for most consumers.

Especially when we look at restaurants and bars, small business owners need to redesign the interior space and study the numbers to validate if the business is financially feasible with reduced capacity. If I could serve 80 customers a day before, but with the new rules I can only seat 40, how can I reduce my costs to face this new reality?

And we really see this as a lasting trend (at least before there is a vaccine that is easily available for everyone), because even if the virus gets under control and the government eases its restrictions, consumer behavior and their fears have changed, and their emotional response will depend on how safe they feel to get back to normal, or at least, the new normal.

The power of community for small business future

Our generation had not experienced a health pandemic this impactful. Many people have died. We can get jobs back, but we cannot bring lives back. Thus, people are looking at the world differently, their priorities have changes, and based on the volume of donations during these times, people became more concerned with their communities.

And this provides a great opportunity for SMB’s that are able to connect with their local communities. As consumers have reduced the number of live interactions they have in their daily lives, they want these remaining interactions to be more meaningful. And what’s more important than helping local businesses that represent the heart and soul of the community? Therefore, small businesses must be active in their social media strategy, get involved with helping those in need, provide safe ways for consumers to purchase their products and services, thus, showing their neighbors that they are an intrinsic part of their lives.

Enough excuses: a digital presence is imperative

If there were still small businesses that didn’t invest in their online structure, this new economy makes this mandatory. Active presence on social networks, communicating actively with your consumers instead of posting just for likes social media advertising based on engaging content, and using creativity to promote products and services. A responsive website that can become an ecosystem for your consumers. Selling with contactless payment options, so consumers can receive at home or schedule a curbside pickup. These are some the options that are critical for entrepreneurs to reach their customer base and ensure sales during this new reality.

Your customer got used to shop for everything from home. If they can’t reach your business from their phone, tablet or laptop, they will find another business that serves them. It’s that simple.

 

The Number: 44%

The Action: Times have changed and so have your business model needs. What worked before will probably not work now and in the future. Start with the basics and restructure your online strategy. If you have a physical store, analyze if you can make the costs work with the new rules and engage with your community.

Did you enjoy this post? Check out our blog for more practical tips to help your small business.

One Comment

  1. Main Street vs Wall Street - Different sides of the economy

    20 Jul 2020 16:40:02

    […] sharply during quarantine, as people couldn’t leave their homes. Many analysts believe this behavior change is irreversible, at least in the short term, as a large group of people will be afraid to eat at public spaces, at […]

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