what are the future of small business
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Answer:
It has been a hard year for small businesses. Social distancing restrictions have been disproportionately damaging to the travel, retail, events, and food service industries, where small businesses tend to concentrate. In July, the House Small Business Committee reported that 110,000 small businesses had closed permanently and another 7.5 million were facing the same fate. The latest survey from Tech.co found that 80% of small business owners say that COVID-19 has hurt their businesses.
However, things are taking a turn for the better as states gingerly reopen and ease restrictions. In addition, support for local businesses is surging following the hardship caused by the pandemic. At the end of July, some 64% of small business owners reported they are confident that they can survive for more than a year under current conditions, up from 34% that held this optimistic view in April, the latest CNBC survey revealed, although the level of optimism varies by industry.
Source: CNBC
Weathering this pandemic will inevitably leave its mark on small businesses, but it also presents an opportunity for a much-needed transformation. Although small businesses have long been rather resistant to new technologies, partly due to resource constraints and limited scale, circumstances created by the pandemic have made a strong case for small businesses to adopt digital tools and evolve their business models to compete in a post-COVID future. Let’s take a look at some of the key trends that are shaping the future of small businesses and how B2B brands that work with small businesses can help them make that transformation smoothly.
Weathering this pandemic presents an opportunity for a much-needed transformation.
A Transformational Moment
Running a small business is no easy task, especially given the shifting competitive landscape today. Long gone are the You’ve Got Mail days when Meg Ryan tried to keep her indie bookstore alive against a Barnes & Noble-style chain owned by Tom Hanks. Nowadays, local businesses are not only competing against the national chains, but also the digital-native startups and D2C brands, flush with VC funding and eager to disrupt consumer-facing categories. Warby Parker is displacing the local optometrists that have been struggling against the likes of LensCrafters, and Intuit TurboTax is disrupting small tax service and accountancy firms, who already have to compete against big companies like H&R Block.
There is a worthy distinction to be made between conventional small businesses and newcomers that are looking to compete in the same consumer-facing categories. Most D2C brands and digital-native companies may tick off some boxes on the list of “what constitutes a small business,” such as employee count, revenue size, and market share. However, we’re not categorizing them as small businesses here, for they do not share the same business model or growth objective due to their difference in funding sources. Pursuing vastly different goals in terms of scale and addressable customers, the newcomers deploy a digital-native go-to-market strategy foreign to most small businesses.
Now that the pandemic has shuttered the conventional offline channels that most small businesses rely on, many have been pushed to adopt digital tools to meet customers where they are shopping and interacting. The lockdowns pushed late-adopters to try out (and stay on) digital channels, thus further underscoring the need for small businesses to evolve.
Take ecommerce for example — In Q2 2020, US total retail ecommerce sales grew by almost a third (31.8%) from the previous quarter, or 44.5% year over year, per the latest data from the U.S. Department of Commerce. A decade’s worth of retail transformation took place in a matter of months. Forced by reality, many local shops quickly opened online stores using services like Shopify and Squarespace; Shopify reported that new stores created on the platform jumped 62% from March 13 to April 24 (the first six weeks of lockdown) compared to the six weeks before. 25% of brick-and-mortar small retail businesses surveyed in June said they’ve added an e-commerce channel to their operations this year.
Besides building out online channels, some forward-thinking small businesses across various industries are seizing this opportunity to upgrade their customer experience to keep up with accelerated behavioral changes. Private medical clinics embraced telehealth services while high-end restaurants packaged upscale dining experiences for at-home enjoyment. Fashion boutique Nava started offering virtual shopping appointments in addition to private in-store shopping by appointment. Junzi Kitchen debuted a new pop-up shop with a revamped American-Chinese takeout menu and a strong digital presence.
Explanation:
Future of Small Businesses
They employ over half of America's private sector workers, produce over half of America's non-farm private GDP, and create roughly 75% of new private sector jobs. The next decade will see the growth of small business continue, and the social and economic impacts of small business increase.