At the beginning of 2020, Fabrizia Spirits was riding on top of the world. The family-run limoncello business was spreading a classic Italian spirit all over New England and beyond. Like everyone else, Fabrizia was blindsided by the Covid-19 pandemic. Moving with speed, Fabrizia pivoted, received emergency permission to produce hand sanitizer for the medical profession, and moved its production line to meet the challenge of the day - all while retaining its workforce and continuing to produce limoncello.
Everyone at Melio has been struck by the extent to which our customers have demonstrated a drive to innovate and adapt, whether it’s limoncello, building new supply chains to ensure local businesses can be equipped for trading in a new environment, like Regency in Massachusetts, or simply utilising new tools to save time and money, like Shifl, who saved $7,500 a month on fees and couriers. The fact they have done so under the huge emotional strain and pressure of supporting their communities, their families, and their employees, is heroic.
Let’s take a step back
Of course, to focus on these victories risks underestimating the extent to which 2020 was a grueling challenge to small businesses. Many of the businesses that we work with have struggled in many ways, and some have stopped trading altogether. Given Melio’s commitment to helping small businesses stay in business, it is our top priority to share how our success stories survived and thrived, and to use that knowledge to help ensure that as many as possible of our customers and potential customers can find prosperity even during this most difficult of economic times.
That’s why we set up a taskforce dedicated to working with small businesses on their needs. That meant expanding our customer service teams, working with partners like American Express and Intuit to provide the best user experience, responding to events as they happened, and working on new features to support cash flow needs at times when flexibility is most needed. It also sometimes means picking up the phone if a check doesn’t arrive, canceling it, and ensuring that the payment is made.
What We’ve Learned
So, what can we say about 2020? What have we learned? We identified three main changes for small businesses:
Firstly - digital solutions are really taking off. I know, I know - we provide one, and everyone has been forecasting this for years. But with the added pressure of Covid-19 disrupting business and supply chains, a more gentle “revolution” has begun - small businesses have started integrating smart solutions into their existing workflows. They’re being smart about what works for them, and what doesn’t. From conversations with our customers, we can see a few reasons why they’ve prioritised this; the need to improve cash flow, the increased need for flexibility, and the pressures of Covid-19 bringing out their spirit of adaptability all being prominent - but what is heartening is that this shift has helped some of our customers go beyond survival, and thrive. They have taken the opportunity to become better managers and business owners.
Secondly - the shift from check to ACH has sped up significantly. This was already happening, but Covid-19 has meant that avoiding physical contact, and reluctance to transmit a physical object, increased how valuable a fully digital payment method is. At Melio, we’ve tried to help contribute to the usefulness of this shift by giving our customers the ability to pay any supplier by ACH, therefore reducing the number of payment methods they need on hand.
Thirdly - businesses have often had to pivot their business model. We mentioned this above, but we really have been struck by the number of business owners who have (often successfully) had to navigate a new path. Of course, this is only useful if you know the terrain. Which brings us to the question…
What does 2021 hold?
We always consider what challenges are here to stay for SMBs, and what might continue to change. For instance, it’s hard to imagine a retail sector where delivery as a significant proportion of trade ever goes away. That change looks to be permanent.
But some things about the terrain can be read from our current vantage point:
- Small business confidence remains low - many small businesses are still touch and go. Both the public sector and private actors need to expand and invigorate their efforts to keep this vital engine of the economy alive.
- Technology can continue to close the gap between small businesses and their larger competitors. Technology lets them leverage the opportunity of becoming more professional, and of getting better services that were usually offered only to the ‘big guys.’
- The incoming administration’s proposals will be of interest to every small business owner.
Whether these efforts will be successful in giving small business owners the relief they so badly need remains to be seen. But one thing we at Melio can promise is that we will continue to try and find ways to make things easier, and to share the insights and perspective we are able to have on the wider sector and economy.
On a more personal note, I want to thank the Melio team for their tireless work expanding and improving our products. We are most proud of the unyielding commitment to ensuring that we connect with our customers, don’t shy away from the real and challenging difficulties they face, and listen to what they need. This is our strongest asset, and I couldn’t be more warmed by how our team has taken to opening our eyes and ears to the people we continue to try and serve.
Thank you to one and all, and a happy and prosperous new year to our customers, potential customers, friends, partners, and everyone else.
*This blog post is intended for informational purposes only and is not intended as financial advice.
**Melio does not provide legal, tax or accounting advice, and you should consult with a professional advisor before making any financial decisions.