Two years into the pandemic, small businesses are still facing challenges to recovery and growth. Business owners report that loss of revenue, temporary closures, and rising costs due to supply chain issues and inflation continue to be the biggest threats to their solvency. Despite these challenges, business formation surged as hundreds of thousands of Americans submitted new business applications in mid-2020; many are sole-proprietorships tapping into the rise of the gig economy. The COVID-19 pandemic accelerated the transition away from brick and mortar operations.
Our economy and workforce rely on small business success. Small businesses generate 44 percent of economic activity and account for more than 99.9 percent of U.S. firms. They employ more than 61 million workers — nearly half of the private sector workforce. They also hire and train most first-time workers. Despite the key role small businesses play in the economy, they remain particularly vulnerable during economic recessions.
To remain competitive in today’s economy, small businesses are adopting digital tools, moving online, and accelerating their digital transformation. Whether that means implementing e-commerce options for retailers and restaurants, adopting project management systems to support a remote work environment, or developing a digital marketing strategy — adaptability is key to resilience and recovery for small businesses.
Ohio business owner Pat Bennett has been making granola for over two decades as a healthy and filling snack food for her family. In 2018, she turned her granola recipe into a full-fledged business, Pat’s Granola, where she relied on face-to-face interactions to get her artisan granola to retailers; she had no online presence at all. When the pandemic rendered in-person outreach an impossibility, Pat had to adjust her business strategy. She recalls how video conferencing platforms helped her to continue pitching Pat’s Granola personally, both to retailers and directly to customers. She shifted her focus to online sales and now runs an active blog where she shares recipes, reflections, and stories about her family.
Bennett’s newfound digital skills not only helped her connect directly with clients but also developed her personal brand. At the age of 61, Pat became a first-time, digital-first business owner.
Digitally advanced small businesses experience significant returns to their investments, earning two times as much revenue per employee and nearly four times higher revenue growth than the previous year. However, an estimated 80 percent of small businesses are still under-utilizing digital tools such as data analytics and management tools. Larger corporations have the human and financial capital to implement new technologies as early adopters, so when small businesses lag behind, it makes it that much harder to remain competitive. Digitization requires significant investment – including hardware, software, and training – from business owners who are still managing loss of revenue and rising prices.
With the support of America’s leading tech companies, small business advocates, local organizations, and their communities, the Small Business Digital Alliance is convening the major players required in support of small- and medium-sized businesses to thrive. Business Forward brings small businesses and policymakers to the table; corporate partners share their expertise and free digital tools; and local organizations provide on-the-ground support for business owners to use digital tools to compete in today’s economy.
To learn more, visit: www.smallbusinessdigitalalliance.com.