Small business owners are a resilient and highly adaptive bunch. They have to be in order to overcome the everyday challenges of running a business, keeping customers happy, and offering great products and services. But, the global spread of Covid-19 made 2020 one of the most challenging years on record for businesses everywhere and SMBs in particular.
As a company whose mission is to help keep small businesses in business, we were curious to know how American SMBs managed to cope with the extreme challenges presented by the passing year, from lockdowns and CDC restrictions to signs of a general economic slowdown.
So, we decided to get the news straight from the horse’s mouth and conduct a survey of 1,000 small business owners in various verticals across the country. The effects of the pandemic on small businesses were far-reaching, and 57% of respondents reported it had a “somewhat” or “very” negative impact on their business. However, the results also revealed a cautiously optimistic forecast, likely primarily due to the adaptive and innovative nature of SMB entrepreneurs.
The survey, conducted by market research company OnePoll, indicated that 31% of small business owners believed embracing new technology helped their business during Covid-19. On top of that, 25% of respondents said the pandemic accelerated the adoption of digital tools by their business.
This makes a lot of sense as many transactions that were once made in person, from grocery shopping to picking up a check, are now done remotely, for the most part. Adapting to the new reality where e-commerce is king, and going out for dinner is no longer an option became a necessity for the survival of many businesses.
From food delivery apps like Uber Eats or DoorDash and online marketplaces, like eBay and Etsy, to digital payment processing services, like PayPal for B2C or Melio for B2B customers, digital tools have made life easier for businesses and helped them keep a steady line of income in the days of social distancing.
A large number of respondents said they digitized the way they get paid by customers (23%) and the way they pay vendors (19%).
One company to make this shift during the Covid-19 crisis is Regency, a Massachusetts-based office supplier. When the pandemic hit, its founder, Mason Sagan, realized he had to completely reinvent his product offering to suit the changing times and focus more on hygiene and janitorial products. Using Melio as its new payment tool, Regency was able to easily connect with new partners, make purchases quickly, without the hassle of vendor onboarding, and get well-needed supplies to its clients in record time.
In addition, 19% of respondents increased their online advertising and marketing efforts, and 17% revamped their business’ website to keep their business on the up and up during the pandemic. 21% increased their digital presence through social media, and 22% started selling products online. 23% of those surveyed also mentioned they managed to successfully shift their employees to work from home.
“As a wine director at a restaurant, this has been a great time to explore new systems and new ways to generate revenue,” said Rania Zayyat, who is also the founder of Wonder Women of Wine (WWOW), a nonprofit advocating gender equality in the wine industry.
Moshe Schulman, a managing partner at New York wine bar and restaurant group Ruffian Kindred feels the same way. “The past 12 months have been challenging,” he said, “but also an opportunity to adapt, create, and survive. It has changed the way we operate. We are now focusing on different models that we otherwise didn't have access to before.”
Interestingly enough, the survey also showed age as a decisive factor, showing younger small business owners were more likely to have made changes during this time.
Of those aged 26–41, 27% percent said embracing technology helped their business during the pandemic, while only 7% of those over the age of 57 shared this sentiment.
39% of younger respondents (aged 26–41) digitized how they get paid by customers, compared to just 12% of those aged over 57. 56% of respondents aged 26-41 found ways to enable employees to work from home, while only 17% of those over 57 did the same.
Small businesses have some advantages at a time of crisis, mainly as they are more flexible and more willing to adapt to changing environments and adopt new solutions than large companies are. The ways in which they chose to cope with the current crisis are just a few examples of that.
*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.