small businesses

Small Businesses Bounce Back

small businesses

 

Innovation and Adaptation Lead to Small Business Growth

ActiveCampaign surveyed small businesses on their company growth, sentiment, and technology usage over the past 12 months, as well as their outlook for their businesses.

The results show the ability to pivot quickly under pressure giving SMBs a unique advantage over their larger and less agile competitors.

Overall small business owners feel hopeful (56%), optimistic (39%), positive (35%), and excited (29%).

Key findings:

Business growth and decline

  • 58% of all survey respondents saw positive growth over the past 12 months, and 58% of them were under the age of 44
  • Positive growth over the past 12 months by demographic:
  • 74% of black-owned businesses
  • 73% of Gen-Z businesses
  • 71% of millennial businesses
  • 60% of women-owned businesses
  • 58% of veteran-owned businesses
  • 57% of rural-owned businesses
  • 53% of parents who own businesses
  • 52% of Native American-owned businesses
  • 48% of LGBTQ

Of the business owners who saw negative growth rate over the past 12 months, 25% did not change their business model during the pandemic. This included moving all services online, closing their brick-and-mortar either permanently or temporarily, running or hosting online events, offering a subscription service, targeting a different audience, creating or selling goods specific to the pandemic, beginning to sell on an online marketplace, or updating their website. They were the most frustrated group during the pandemic (39%), but 57% were hopeful for the next year. Interestingly, 69% of businesses with negative growth rate were run by owners aged 45 and older

Perhaps the most telling stats—those who adapted their business model grew, and those who failed to adapt did not. In fact, 70% of B2C companies and 67% of B2B companies that grew changed their business model in some form over the last 12 months:

  • For B2C companies, the most popular strategies included moving all services online (22%), targeting a different customer base (18%), and launching their products on an online marketplace (17%)
  • B2B companies saw success by updating their website (29%), targeting a different customer base (23%), and pivoting to host/run digital events (20%)

There’s so much valuable data in the report. Learn more here.

 

Small Business Recovery

Kabbage, an American Express Company, issued the second installment of its Small Business Recovery Report tracking U.S. small business recovery and growth through 2022. The latest edition of the report shows a spike of small businesses reporting they’re fully open and a higher increase of in-person sales as vaccination availability expands.

The survey showed 85% of small businesses were fully open for business in March, an impressive 51% increase since the first Small Business Recovery Report, which covered February 2021.

Of those respondents:

  • 32% have a physical location which is now back to full operation
  • 16% have an online store as well as a physical location, which is fully open
  • 15% shifted their company online due to the crisis and are open as a result
  • 22% were always online and therefore never impacted

Shopping Small, Safe and In-person

Small businesses also reported the increase of in-person transactions reached an average of 15% between February and March 2021, more than double the volume recorded between January and February 2021 (7%).

Making Recovery a Reality

In the first Small Business Recovery Report, Kabbage asked respondents which milestones would best indicate their companies had recovered from the pandemic. The top responses were when they could pay their employees’ full wages without concern and when customer demand meets or exceeds pre-pandemic levels.

In this report, they asked how many had successfully reached these milestones: 64% were now paying their employees’ full wages without concern, and 51% said customer demand and new inbound business has restored to levels before the crisis.

 

Optimistic Recovery for Small Businesses

Sage recently revealed the true levels of resilience, recovery, and recruitment among small businesses as major economies reopen globally, and consumer confidence rises. Sage’s recent sentiment survey shows that small businesses have reached a turning point, and confidence has largely returned.

In fact, 75% of small businesses surveyed are optimistic about the future of their business and growth trajectory in the next year. Optimism is mainly driven by the vaccine rollout program (45%), the return of in-person customer engagement (35%), and projections of increased consumer spending (32%). Over 80% of small businesses do not expect another lockdown, with most small businesses feeling optimistic their companies will return to pre-pandemic levels this summer—both in terms of profitability and staffing. In fact, 81% of small businesses across markets believe their business will return to pre-pandemic profitability this summer.

The ability to adapt was critical during the pandemic, and 60% of the small businesses say they have coped well with the barriers COVID-19 placed on them, making big changes to how their businesses operate. In the U.S., 38% of small businesses said they cut overhead costs and, because of further financial barriers, 27% said they relied on their savings to make it through.

Small businesses turned to technology to overcome difficulties and create efficiencies within the company. In the U.S., 64% used new technologies to sell more and stay connected with customers or improve how their business operates.

Renewed optimism is driving hiring plans, and as small businesses grow their workforce, they will continue to look at how they can increase diversity and prioritize employee wellbeing. One-third of small businesses are expected to hire in 2021, which could create millions of jobs. When applied to ONS data on employment from small businesses, this could mean 4.6 million more jobs in the U.S.

Small businesses across the globe are increasing their focus on ways of working and employee wellness, with 47% of U.S. small businesses improving flexible working.

 

Small Businesses Continue to Thrive  

Small business owners say they’re doing better than expected as the economy continues to gain steam amid the waning pandemic, according to the results of the 2021 Small Business Survey, recently released by TD Bank, America’s Most Convenient Bank®. The survey, which polled SBOs with less than $5 million in annual revenues, from sole proprietors with home-based businesses to professional services and retail, showed 41% expect to increase revenues this year, while only 9% anticipate a decline.

What’s more, 57% expect to expand hours and/or operations, and 9% will add a business location in the next 12 months. Main Street may not see as many vacancies in 2021 as predicted: just 3% of SBOs anticipate closing permanently in the next year, and only 2% plan to sell their business. Despite their cautious optimism, respondents identified the national economy (43%), COVID-19, and associated operational restrictions (41%), and a decrease in revenue or sales (39%) as their top challenges in the year ahead.

Expansion Instead of Extinction

Despite the COVID-19 pandemic, 37% of SBOs are considering expanding their product lines and services, 73%  say their employee base will stay the same, while 16% anticipate hiring additional staff.

More Government Aid is Needed

While 66% of SBOs think government programs like the SBA’s Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) were helpful, they say more funding needs to be allocated to the programs to really make an impact.

Cautious but Confident

Despite the financial challenges due to COVID-19, 78% of SBOs are still confident in handling the finances and accounting for their businesses. They’re also confident about:

  • Using digital/online banking features (76%)
  • Managing their employees and human resources needs, such as when to hire (74%)
  • Knowing when to seek additional credit or financing (66%)
  • Knowing how to grow their business (63%)

Despite the surge of contactless payment solutions during the pandemic, a surprising 66% of SBOs still process payments by collecting checks and cash (the most popular payment method). One-third use person-to-person payments like Zelle or Venmo, e-commerce/online sites (28%), or electronic transfer such as ACH payments (28%.) Only 19% use a traditional Point of Sale (POS) system.

Future Finance Needs

When considering finances, 58% have no loan or line of credit needs, although 33% applied for a loan—including PPP—or line of credit in the past 12 months. This is higher than 2019, when just 20% of businesses had applied for a loan or line of credit, and 62% had no credit needs.

Looking ahead, only 14% say they’d apply for a loan or line of credit in the next year. Most are saying “charge it,” with 60% reporting they have a credit card to cover business purchases and 42% using cashback or other credit card rewards to fund critical expenses.

 

Inside Small Business

According to the recently released 2021 Inside Small Business survey from The UPS Store, 84% of the general population had concerns about small businesses closing in their area/town due to the challenges of the COVID-19 pandemic. However, small business owners adjusted:

  • 42% said they’d made financial adaptations to their business
  • 38%  made operational changes
  • 37% made adjustments to their workforce

Sadly the pandemic also impacted how the public views small business ownership—fewer Americans say they’ve ever dreamed of starting their own small business (55% in 2021 vs. 63% in 2020, 65% in 2019, and 66% in 2018). But “being your own boss” (48%) ranked as the most exciting aspect of owning a small business for the third year in a row, followed by “Succeeding and taking pride in what you build” (43%), “making your own hours” (37%) and “financial independence” (37%).

The UPS Store Inside Small Business Survey also highlighted the different stressors affecting consumers and small business owners—42% of small business owners were most concerned about money/finances vs. 31% of the general population. And 20% of business owners said they didn’t have enough time to get things done, vs. 14% of the general population.

Take a look at the survey for more insights.

 

Money & Opportunities

One-Stop-Shop Solution for SMBs to Automate Their Financial Operations

Bill.com (NYSE:BILL) recently completed its acquisition of Divvy, a leader in spend management. “We are thrilled to welcome the Divvy team to Bill.com,” says René Lacerte, Bill.com CEO, and founder. “Together, we can help SMBs manage their B2B spend and workflow with one simple solution, saving them valuable time and money and providing real-time insight into their spend and cash flow. With the elegant spend management solution that the Divvy team brings, their dedication to serving SMBs, and their passion for driving innovation, together we can accelerate our vision to help SMBs transform, grow, and thrive by automating their financial operations.”

The acquisition of Divvy supports Bill.com’s mission to make it simple to connect and do business. The expanded solution will enable businesses to digitally transform their financial operations and automatically manage accounts payable, accounts receivable, and corporate card spend all in one place. With real-time insight into all their B2B spending and access to multiple payment solutions, businesses will be empowered to spend smarter, better manage their budgets and cash flow, and simplify their back-office financial operations.

 

Managing Cash Flow

QuickBooks just unveiled new data in its 2021 State of Payments and Cash Flow report showing how small businesses around the globe manage their cash flow and payments in today’s post-pandemic economy. And while all signs point to a positive recovery, the data shows more than half of small businesses are still experiencing new challenges as economies reopen.

Key Findings

  • Cash Flow Challenges: Cash flow problems are among the top three causes of stress for 76% of small business owners who experience them.
  • Collecting Payments: Worldwide, an average of 23% of all payments to small businesses are late, despite most small businesses saying they are proactively working to mitigate overdue payments with incentives for early payments and late fees.
  • Controlling Cash Outflows: 79% percent of small businesses have struggled to pay a supplier when faced with cash flow issues, up from 71% pre-pandemic.
  • Impacts of Cash Flow Problems: 40% of businesses with cash flow problems indicate business growth is restricted, and nearly 3 in 5 small business owners have made poor business decisions due to concerns about insufficient cash flow.

There’s more insight in the full report, which discusses the tools small business owners utilize to better manage their cash flow.

 

Help for Restaurants

Kitchenall reports 11% of all restaurants in the U.S. have been forced to close because of Covid. And while that’s devastating news, it’s also an opportunity for entrepreneurs who’ve always dreamed of opening a restaurant to get started.

Restaurants aren’t low-cost startups, so check out Kitchenall’s guide and cost calculator for opening a restaurant before you get started.

 

The New “Open”

Wells Fargo recently launched its We Made a Way. Together campaign, with the goal, they say, to highlight women- and diverse-owned small businesses who were disproportionately impacted by COVID-19 and provide a platform for other small business owners to access vital information and available capital.

As part of the campaign, Wells Fargo commissioned artists and paired them with businesses:

to reimagine the universal symbol of small business—the “Open” sign, taking inspiration from real stories of women- and diverse-owned small businesses.

The Open for Business Fund was created by donating all fees from the PPP program. The Open for Business Fund has translated into roughly $1 billion in available financing and 7.5 million hours of technical assistance for small business owners across the country.

You can learn more here and share your own story using the hashtag #OpenForBusiness. And find more information on the Wells Fargo Open for Business Fund.

 

Did You Panic Buy Life Insurance?

A new report from Expertise.com found many Americans, especially younger ones, “panic-bought” life insurance during the pandemic, and now at least 20% of them regret it.

Key findings:

  • 25% of Americans bought a life insurance policy during the pandemic. Within this group, 21% were ages 18-24, 32% were ages 25-34, & 26% were ages 35-44. Just 22% were over 45.
  • Of those who bought life insurance during the pandemic, 21% now regret it, and 13% preferred not to say. Within that group of 21%, 74% were between the ages of 18 and 44.
  • Of those who tested positive for COVID-19 before taking out a life insurance policy, 27% found it hard to find an insurer willing to accept their application, while 38% said it raised their prices.

64% of consumers who bought life insurance during the pandemic bought it online, while 21% bought their policy in-person. In 2018, only 29% of consumers said they purchased life insurance online.

 

Marketing

Get Discovered Online

Square and Google Merchant Center have joined forces, making it easier for Square sellers to reach new customers through direct product listings on Google. Square for Retail merchants can now have products from their businesses populate right alongside items from other e-commerce stores of all sizes, helping smaller sellers to increase reach and revenue by uncovering new customers buying online.

 

Best Times to Post on Social Media

Check out the latest info from Sprout Social—the 2021 Best Times to Post on Social Media report—which outlines the best and worst times to post on Instagram, Facebook, Twitter, and LinkedIn according to engagement and usage data from its 20K+ customers.

The pandemic led consumers to change their use of social media and forced companies to pivot their strategies, resulting in notable changes from past years

For example:

  • Platforms like Facebook and Instagram saw less “off” time and increased engagement during evenings and weekends compared to previous years
  • Tuesdays and Wednesdays are the best days for engagement across all four platforms

Since 91% of business leaders plan to increase their social media marketing budgets over the next three years, this report can help you maximize your social investment.

There’s a lot of value and insight in the report. Be sure to check it out.

 

LinkedIn Marketing Solutions Offers New Features

LinkedIn has announced new marketing solutions, including:

  • Tools for marketers to grow their audience and amplify brand presence: 
    • Boosting: With the click of a button, you can “boost” any organic post you notice is performing well, turning organic posts into paid ads that appear on the LinkedIn feed.
    • Event Ads: Amplify your events with eye-catching ads to maximize attendance, and gain valuable insight into the impact of their event spend.
    • Custom Streaming: Easily broadcast your next LinkedIn Live stream using your favorite streaming tools, like Zoom, WebEx, or OBS.
  • New analytics and measurement tools for deeper insight into audiences: 
    • Event Analytics: Gain access to aggregated reach, engagement, and firmographic metrics that will help you communicate the value of your events and optimize future ones.
    • Mobile Page Analytics: Gain on-the-go visibility into how your LinkedIn Page is performing, whether organic or paid, all from within your LinkedIn mobile app.

There are more details in this blog post.

 

Are We Obsessed with Social Media?

The simple answer is—yes. Apparently, according to a survey from All Home Connections,  Americans are checking their social media accounts in some, well, unusual places.

The survey of millennials and Gen Zers shows:

  • 30% of Americans going back to work are keeping track of their followers on social media by retreating to the bathroom to scroll endlessly.
  • 23% use social media to escape the reality of waiting in lines for things they usually don’t think twice about.
  • Studies show that to get a good night’s rest, people shouldn’t be on their phones at night—but 25% of people ignore that advice and scroll social media in bed right before they go to sleep.

 

Tools & Services for Small Businesses

 Powerful CRM for Small Business

Bigin, the pipeline-centric CRM for small businesses from Zoho, just released new features,  including an industry-first mobile pipeline view. Bigin’s new version also includes enhanced capabilities to help small businesses foster their customer relationships while recovering from the effects of COVID-19. With the release of new customization features, public APIs, new integrations, and enhanced capabilities on mobile devices, Bigin makes the CRM experience easier for its small business customers.

Key Product Updates

  • Improved usability:A customizable pipeline view allowing customers to rearrange their pipeline stages and rename default modules based on their unique needs.
  • Faster, actionable search: Preview search results instantly and take quick actions such as field updates, sending emails, and adding new notes without having to visit the records individually.
  • Greater extensibility: Connect with any third-party app of your choice and new native integrations with Mailchimp, Zoho Books, and Zoho Invoice.
  • More power to telephony: Bigin’s in-built telephony gets added contact center features such as call recording, call transfer, and automatically queueing incoming calls in waiting. It also allows more than 85 third-party telephony providers to integrate with the CRM.
  • Enhanced mobility: Industry-first mobile pipeline view, making it easy to sell right you’re your smartphone or an exclusive app on MacOS.

Pricing and Availability

$7/user/month, billed annually.

 

How 5G will Help You Succeed in Today’s Mobile-First World

T-Mobile recently launched new services to help small businesses succeed in the mobile-first, digital-first future, including:

  • New Business Unlimited smartphone plans with unlimited 5G access, high-speed mobile hotspot data, and more Premium Data, like the Magenta MAX plan with unlimited Premium Data
  • Small Business Internet delivering fast, reliable connectivity without annual contracts or costly surprises
  • Facebook Advertising on Us, a new program from T-Mobile and Facebook designed to accelerate small businesses’ digital marketing capabilities, including up to three one-on-one consultations with digital marketing experts, $200 of digital advertising to be used on Facebook or Instagram, and valuable resources to help small businesses reach more customers

T-Mobile believes 5G will help small businesses thrive post-pandemic. Read this blog by Mike Katz, EVP of T-Mobile for Business, explaining how.

 

Smart Lockers Help Businesses Reopen Safely

Pitney Bowes Inc. (NYSE: PBI) recently launched ParcelPoint™ Smart Lockers, a new unique suite of robust, secure contactless locker solutions. These smart lockers give organizations the confidence that every package and asset moving across a location will be delivered safely and securely. Powered by proprietary SaaS software, businesses can remotely manage a single locker or a fleet of lockers across locations, backed up with unrivaled local Pitney Bowes service, support, and detailed analytics.

The ParcelPoint Smart Locker portfolio augments existing Pitney Bowes locker technologies, offering businesses a choice of smart locker solutions which best fit their requirements and budget. Express Series smart lockers provide a sophisticated, pre-configured, easy-to-use solution built to meet evolving package and mail volume demands, which can be delivered in four weeks or less in the lower 48 states. With SendSuite® Tracking Online—Pitney Bowes SaaS parcel tracking and processing software—already integrated into the solution, Express Series lockers simplify the end-to-end package and mail management processes.

To find out more, listen to ‘Modernizing Processes with Contactless Delivery’ here. For insights on the future of work and return to the office, you can access their recent webinar here.

 

Wix Launches New Mobile App

Wix (Nasdaq: WIX) recently launched Spaces by Wix, a native mobile app for customers to engage and transact with businesses built on Wix. Wix says in the U.S., about 70% of business owners’ customers interact through mobile.

Every user creating an online presence on the Wix platform has automatic access to Spaces by Wix. With a few clicks, every user can create the mobile app experience specific to their business needs and invite customers to join as community members. Members can purchase products and services, book classes or appointments, read and share blog posts, join interest groups or forums and receive live updates, all through the mobile app.

Already, more than 5 million customers have downloaded the Spaces by Wix app and are engaging with hundreds of thousands of businesses built on Wix. Customers using the app are more likely to engage with businesses and communities.

The company reports business owners using Spaces by Wix experience a 150% increase in purchases through Wix Stores and a 300% increase in services booked through Wix Bookings.

 

Employers & Employees

Experian Launches New Services for Businesses

Experian recently expanded its Employer Services offerings and released Experian Verify™, a new suite of real-time income and employment verification products. 

Improving financial outcomes by verifying income and employment status 

With Experian Verify, lenders can create a more complete picture of a consumer’s financial situation quickly and easily. The products provide credit card, personal loan, auto, and mortgage lenders as well as tenant screeners and employment screeners with near-instant access to tens of millions of active records to verify an applicant’s income and employment status in origination, account review, and prequalification decisions.

Paving the way for industry disruption

Experian’s recent acquisitions of Corporate Cost Control (CCC)Tax Credit Co. (TCC), and Emptech, and its growing network of direct payroll access deliver unique and differentiated employee records into Experian Verify and lay the foundation for the company’s move into employer services.

With all three entities now under one roof, Experian can offer employers, HR, finance, and tax professionals a one-stop shop to outsource complex and time-consuming tasks more quickly, cost-effectively, and securely. Services provided by Experian include:

  • Employment and income verification
  • Electronic I-9 verification management
  • Work Opportunity Tax Credits (WOTC) management
  • Unemployment claims management
  • Other tax credits and incentives

Learn more about Experian Verify and Experian’s Employer Services

 

Big Businesses Hiring More Freelancers

Fiverr International Ltd. (NYSE: FVRR) just released new data from Fiverr Business, their relatively new platform, showing bigger businesses are relying on freelance talent more now than before the pandemic. Overall, 45% of companies surveyed are using more freelancers than pre-Covid. The bigger the businesses, the more likely they are to tap into freelance talent: 10-49 employees (48%), 50-99 employees (62%), and 100-249 employees (64%).

As a result of COVID-19, businesses everywhere have been forced to adapt and think about ways to augment their teams to be more flexible, agile, and productive. Bigger businesses (100 to 249 employees) surveyed are focusing their investments in areas such as digital marketing (47%) and website development (45%), mobile app development (41%), and sales (30%). By tapping into freelancers to help with these areas, they are not only saving time and money, but they are opening themselves up to a global pool of talent who can help them scale.

So if you’re a gig entrepreneur, depending on your skill set, consider targeting clients on Fiverr Business, which was specifically built for larger businesses and corporate teams gives them all the tools they need to easily tap into and collaborate with this workforce, which is clearly of increased importance to them.”

Key findings:

  • The bigger the business, the more money invested in freelance talent. 65% of businesses surveyed with 100-240 employees are turning to freelancers more now than they were before COVID-19.
  • Digital marketing and website development were key focus areas for larger businesses during the pandemic. 47% of businesses surveyed with 100-240 employees said they ramped up their digital marketing spend, and another 45% said website development was a key priority. Other areas they are investing in include mobile app development (41%) and sales (30%).
  • Marketplaces were favored over “build your own site” tools. 68% of businesses surveyed with 100-249 employees put money into Amazon to enhance or build their online presence, and 45% favored eBay.

The larger the company, the more likely they are to have lasting changes to their team structures and operations because of the pandemic.

 

The Differing POV of Employers and Employees

WorkForce Software recently released the findings of its workplace experience report, showing “stark discrepancies between [businesses] and their employees when it comes to the quality of the employee experience throughout the COVID-19 pandemic.” This was especially true for the ‘deskless’ workers, those working in front-line roles and making up 80% of the total global workforce.

Across the board, there were significant gaps between what employers believed they were providing and what employees are actually experiencing, suggesting employers are not delivering employees the solutions necessary to engage easily in the new world of work.

Shift-Scheduling and Lack of Flexibility Generate Frustration

According to the survey, employees felt less optimistic than employers about their company’s approach to scheduling shifts throughout the pandemic. Employees’ and employers’ opinions also diverged significantly on employer willingness to offer flexibility over the past year.

  • 81% of employers surveyed believe their company effectively adapted to pandemic-related scheduling issues, but only 64% of employees felt the same way
  • 82% of employers believe they offer scheduling flexibility, while only 59% of employees agree
  • 87% of employers say they help hourly workers deal with personal circumstances that affect work schedules, but only 60% of employees agree

As a result, more than half of employees said they’d prefer to work for an employer that offers more flexibility in scheduling, showcasing just how integral understanding and finding flexible solutions are in a post-pandemic world.

Use of Outdated Tools and Technology Persists

The report also revealed many companies still rely on antiquated systems to manage their workforce, demonstrating a need for immediate investment in modern solutions. In fact, only 50% of employees indicate using online portals to track time and attendance, and 56% of employees report severely dated methods for time tracking, including mounted wall clocks, paper forms, and punch cards.

Read more details in the report here.

 

Quick Takes

Do You Hate Meetings?

So many of us do. Check out this article from Project Manager News, which addresses the average amount of time spent in meetings, the cost of unproductive meetings, and how meetings have changed since COVID-19. It also notes why people hate meetings, what types of meetings employees like best, and how to improve the way we have meetings.

 

Digital Transformations

Small project-based businesses, such as professional services, consultants, and government contractors, stand to benefit the most from a digital transformation. You can learn more about it in this interesting blog post from Deltek.

Small businesses reopening stock photo by Kat Ka/Shutterstock