Small business Post Covid Partum. Would you agree that 2020 was a year of consistent turbulence? And chances are that 2021 certainly will Not be business as usual. “Thanks to post -covid pardon”, according to the experts.
Facebook’s new report on the State of Small Business surveyed 86,000, companies across the US with fewer than 500 employees. It paints a clear picture of the many challenges that small businesses are facing because of COVID-19.
The Majority of Personal Business Increased was Women Owned
As an example, 31% of owners and managers reported that their small-medium business (SMB) is not currently operating. Among personal businesses, that number rises to 52%, of which the majority (55%) were led by women. Further, millions of small businesses around the U.S. are operating on thin margins with little to no safety net. Those from restaurants, retail stores, field service providers, and construction companies.
Unfortunately, the odds were stacked against it. According to the Bureau of Labor Statistics (BLS) data shows that 20% of all small businesses fail within their first year and another half fail within the next five years.
To make matters worse, a global pandemic was thrown in the mix. Eighty percent of small businesses were dealing with slower sales. Thirty-one percent experienced supply chain disruptions. Lastly, twenty-three percent have sick employees. Regretting was seeing unprecedented times that even long-standing businesses won’t survive.
Expert Facts, Stats, and Charts Fortunately, included in this report are facts, stats, and charts from some of the leading experts and surveys. Such as Facebook State of Small Business survey, USChamberofCommerce, Software Advice, and more.
Our goal is to offer solid facts about the effects of Covid. We’ll share how some businesses walked away without a scratch. Alternatively, others, unfortunately, had to close their doors permanently!
As COVID-19 pandemic has gone through phases, each of which is characterized by a different set of needs and requirements that have impacted our lives and businesses.
COVID-19 Pandemic
While we can put 2020 under the theme “new normal,” we are now in a transition phase toward the “next to normal.” Staying on our toes learning from our painful past. Yet aggressively implementing strategic plans for future disruptions, is just smart business!
Keep reading because we uncover the critical truths about Covid’s marketing about-face. How this unannounced intruder left us scrambling for solid footing and quick decision making. …Or get left behind forever!
The traditional business model has been reformed overnight. We have had to get used to new ways of working without a second thought. All in all, there are some success stories. Further, there are imperial data supporting future trends
Facebook Survey,
According to the Facebook survey, SMBs are turning to internet tools.
- 51% of businesses report increasing online interactions with their clients.
- 36% of personal businesses that use online tools report that they are conducting all their sales online.
- 35% of businesses that have changed operations have expanded the use of digital payments.
Online sales have grown to the highest level in The CMO Survey history. They now constitute 19.3% of sales—a 43% increase over just three months ago. Small companies (those with fewer than 500 employees) are taking advantage of selling online, with e-commerce accounting for 26.1% of sales.
Digital Adoption
Technologically advanced small businesses make more money and hire more people.
- The adoption of digital cut revenue losses in half (-12% for digitally advanced SMBs vs. -23% for digitally uncertain SMBs)
- Small businesses that incorporated online marketing hired 2x more employees on average vs. digitally uncertain SMBs.
- Technology-based businesses retained customers at a 5x better rate They acquired new customers at a 20x better rate during the pandemic.
- Internet-based small businesses are more than 2x as confident about making new hires in 2021 (88% vs. 36% of digitally uncertain).
Small Business Post Covid
Additional Findings
- 81% of SMBs report changing their business to incorporate new digital tools and strategies due to COVID.
- 98% of small businesses say digital tools are helpful in running their business.
- 59% of small businesses say they have been more helpful during the pandemic.
- 93% of small businesses report maintaining or increasing their use of digital tools post-COVID.
- 92% of small businesses are optimistic that their business will grow. (2,200 surveyed small businesses -15 stated)
- 81% of small businesses cite future preparedness as a top concern, with 89% of digitally advanced vs. 65% of digitally uncertain small businesses desiring to become more resilient.
- During the pandemic, approximately 11 million small businesses (37%) would have closed all or part of their business without digital tools.
Methodology
In mid-2020, Google commissioned LRWGreenberg, a Material+ Company, to conduct a study in the US to better understand the shift in digitalization among small businesses amid the ongoing COVID-19 crisis, and how digital tools have helped these businesses survive the pandemic. Using the 2020 US study as a baseline, we conducted this study on SMBs in order to understand the evolution of the impact of the pandemic, and the continuing role that technology has played in helping SMBs.
The results presented here are based on the findings from a quantitative survey of 2,037 SMB leaders from across the US, conducted from February 17 to March 11, 2021. The data were weighted by gender, ethnicity, veteran status, region, business size, and vertical, for an accurate representation of SMBs nationally. Crucially, this study focused only on those SMBs that weathered the COVID storm, at least to some degree. Those who shut down permanently were not included in this study.
Additionally, using the LRWGreenberg study as a baseline, 3C commissioned Catalyst Research to conduct a supplemental survey of 2,200 SMBs across 15 states utilizing an identical participant profile and many of the same questions, while also seeking to gather additional forward-looking sentiment. While the supplemental survey data is not statistically representative, with more than 2,200 completed interviews across 15 states, findings – if not representative – are certainly illustrative of reliable trends and observations.
SMBs’ use and continuing adoption of Digital Safety Net tools and services vary, due to several factors.
- Digital adoption among small businesses ranges from the digitally advanced (40%, that use a large and diverse number of tools) to the digitally uncertain (24%, that have low adoption rates and remain skeptical of digital tools).
- Nearly all (97%) digitally advanced small businesses adopted new digital tools and business strategies during the pandemic, while only half (51%) of uncertain businesses did.
- Many SMBs are cautious about Digital Safety Net tools due to concerns about cost, ROI, regulatory risk, and their own digital knowledge/comfort, but digitally advanced SMBs overcome these concerns while digitally uncertain SMBs do not.
Pandemic Challenged
Government-mandated closures and social distancing requirements forced businesses that relied on in-person interactions to suddenly change the trajectory of their digital transformation journey. And the stakes could not be higher. For many, the decision is to digitize or shut down for good.
Several months in, companies are equipping themselves for the long-term: building real-time data dashboards, re-formulating brand strategies, and slashing internal red tape to move faster. Brands are doubling down on fast consumer insights, looking to determine which new trends are here to stay and which are just a flash in the pan. In-housing creative or media has become a priority for some as they seek more flexibility and control at a lower cost. Elsewhere, daily scrum meetings and building COVID-19-ready client-agency relationships become the norm.
As Marie Gulin-Merle, a senior marketer at Google noted, the ability to react in real-time will be an important skill for marketers going forward.
The rules around when you can reopen vary from state to state – even from city to city. But, even when your state makes the decision to reopen, it may not be the right time for your business. In California, for instance, the state gave businesses the green light to start reopening in late April.
Tour companies, like kayak and surf adventure company Everyday California, we’re hesitant to open at full capacity. Just because the state permits it doesn’t mean consumers are ready to head out again. And, if you reopen too soon, you risk dedicating valuable working capital and time without making a sale.
Challenges and Solutions
Challenge
Everyday California decided to partially open their ocean adventure tours business, owners Chris Lynch and Michael Samer told the New York Times. They started offering curbside kayak and surf rentals at first, delaying tours and waiting to open their retail shop. As they were able to assess demand, Everyday California started to offer tours at 50% capacity under certain conditions, such as mandatory masks.
Solutions
The company decided to open in phases. Other businesses can follow their lead. Assess your products and services to see what you can sell with little to no contact. And keep your online store active while you phase in in-person sales to ensure there’s no drop-in customer service
Challenge: Bringing back staff
Many businesses are asking for customers to help mitigate the cost of keeping their staff (and patrons) safe. “Some hair salons, restaurants, dentists’ offices are charging for protective gear, more disinfectant, and those Plexiglas barriers at the cashier. Sometimes it’s in the form of a clearly stated COVID-19 surcharge, often between 3% and 5%, to cover the cost of things like masks and gloves,” reported Marketplace.
Solution:
Be transparent. If you do decide to share the costs with your customers, make sure to be transparent about why their bill has gone up. Surprising a customer with a higher bill can negatively impact brand loyalty. It’s better to be proactive about outlining the steps you’re taking to keep everyone safe and use that opportunity to explain why some prices may be higher than customers are used to.
Challenge
The challenge, as one expert described, to reopening with your team is twofold. First, are your employees willing and available to come back? And secondly, are they able to follow the proper procedure to reopen safely?
Solution
Update your leave policy and employee handbook to include a work-from-home option and protected COVID-19 sick leave. Your temporary coronavirus sick leave policy should allow team members to stay home for at least two weeks if they are ill. “Employees who have tested positive for Covid-19 or report any symptom of coronavirus shouldn’t return to the business until they are free of all symptoms such as a fever, cough, or shortness of breath for at least 72 hours, and not using any medicine such as aspirin that might mask symptoms,” wrote Barron’s.
Conclusion:
We hope you found this report helpful. Implementing a digital marketing strategy will put you back on the road after suffering from this horrific pandemic. We highlighted a few pointers. That we thought should be remembered.
- Don’t underestimate the importance of keeping up to date on current technology and automation.
- Keep fluid to make quick marketing decisions. Those quick decisions made during the pandemic worked out well.
- Unfortunately, many of the changes made during the pandemic are here to stay, learn to transform your marketing to capitalize on the current trends.
Did you have to do an about-face during the pandemic?
Were you one of the few businesses that adjusted to change? Or were you one of the many that took a hard hit?
What are you doing today differently to prepare for the next catastrophe?
Please share your thoughts by leaving a quick comment below.
P.S. Enjoy this post? You can share it on Twitter here!
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