No doubt about it, 2020 has been a wild ride. And that’s especially true for small business owners. In early spring, the coronavirus pandemic forced thousands of small businesses across the country to close their doors and quarantine. Months later, many businesses are still struggling to recover—some never reopened.
A new QuickBooks survey reveals just how hard the economic impact of the coronavirus has hit small businesses. One in 4 business owners says they have had to decrease the number of employees on their team this year. Another 15% say they’ve relied more heavily on contractors to keep their business afloat.
Nearly half of small business owners (45%) say they applied for funding from a coronavirus relief program. Funding came from the Paycheck Protection Program, Economic Injury Disaster Loans, and Employee Retention Credits. Of those who applied, only 61% say they received the funding they needed.
But small business owners are nothing if not resilient. When the going got tough, the tough got going.
Pandemic sparks innovation for small businesses
67% of business owners say the current state of the economy either hasn’t impacted innovation in their company or has impacted it positively. These businesses have invested in virtual services and technology, created and sold more products online, and turned to online payment systems to innovate.
In fact, 28% of small business owners say they’ve sold more products and services online this year. Almost all of them (94%) say the coronavirus has influenced that change. And it’s been a change worth making. Experts predict that e-commerce is here to stay. Consumers will continue shopping online long after the pandemic has passed.
Almost all business owners who have invested in innovation this year have seen at least a small increase in revenue as a result. And more than half say revenue increased by more than 50%.
Despite the pandemic, the majority of small business owners and 72% of those looking to start a business feel optimistic about the road ahead. But the road ahead certainly looks different than it did before.
Navigating the road ahead
Businesses everywhere are investing more in health and safety protocols to keep their customers and their employees safe. Many business owners are retraining their workers to thrive in a post-pandemic world. And drastically more employees are working from home more often.
And small business owners are beginning to see the benefits of remote work. 75% of people who plan to open a business within the next 12 months say they’ll have at least some remote workers. 23% say they’ll be hiring a 100% remote workforce.
Remote work has steadily risen in popularity over the last several years. In the wake of the pandemic, many business owners have considered a permanent shift to virtual teams. And the survey results might indicate why. 28% of small business owners say recent changes have had a positive impact on productivity. Another 38% say productivity hasn’t wavered.
Business owners have also discovered that there are additional benefits to employing a remote workforce and investing in e-commerce. One in 3 small business owners says they have significantly reduced overhead costs through efficiency savings since the start of the pandemic.
2020 certainly has been a roller coaster. But for now, it seems that some small businesses are back on an uphill climb.
5 big changes small businesses should make this year
Small business owners are focused on growth in 2020 and beyond. The majority is making major changes to meet the demands of a post-pandemic society—even if the coronavirus didn’t affect them directly. One in 3 says they’ve cut costs, and 1 in 4 has turned to e-commerce. One in 5 has developed new products and services to better serve customers.
Revenue is up for these businesses. And if you want to follow in their footsteps, we have a few tips.
1. Reduce expenses
34% of business owners said they’ve cut costs this year, and half said the coronavirus influenced the change highly.
Business expenses not directly related to creating products or services could be eating your budget. Reducing these unnecessary expenses can increase your bottom line or keep your company afloat during hard times. At the very least, analyzing your monthly expenses can help you determine which are critical and which you could cut if needed.
Start by weighing your overhead costs. Overhead costs include things like rent and utilities, office supplies, and maintenance. If your cash flow has slowed to a drip, discontinue nonessential services, cancel or reduce premium services, or negotiate with suppliers to get a lower rate.
2. Focus on health and safety
32% of business owners say they’re investing in more visible health and safety protocols in the aftermath of the coronavirus. After all, experts believe that many consumers may still feel nervous to resume normal activities as restrictions lift. Customers and employees alike will want to know you’re doing everything you can to keep them safe.
The Centers for Disease Control and Prevention (CDC) website is a good place to start for health and safety resources. Find out how to keep your employees healthy and safely resume business operations and get cleaning and disinfecting guidance.
If you haven’t already, now is a good time to examine your sick leave and remote work policies. You might look for ways to minimize contact between employees and customers and train employees to operate in a post-pandemic environment.
3. Embrace e-commerce
Over 1 in 4 business owners (28%) say they’ve sold more products and services online this year. Almost all of them (94%) say the coronavirus has influenced that change. If your business isn’t built for the virtual world, it can be challenging to make that shift. But there are a few small steps you can take to offer online services and move your business in the right direction.
- Start selling gift certificates. Gift cards can be an easy way to keep your business moving forward while you adapt to the new normal.
- Join an online marketplace. E-commerce platforms, like Etsy, make it easy to sell products online without building a website.
- Reimagine your offerings. Think of new ways to serve your customers virtually. Consider free shipping or local delivery.
4. Rethink your remote work policy
27% of small business owners say more of their employees have been working from home this year. And many of them have considered making the change permanent. In fact, 48% of current small business owners say at least some portion of their workforce will continue to work remotely even after restrictions have lifted.
There are big benefits to hiring remote teams, but managing happy and productive remote teams takes work. Before you make a permanent transition, make sure you’ve documented and communicated your remote team expectations. Take additional precautions to keep your business and employee data safe while using personal networks. And remember that remote workers can easily feel disconnected without face-to-face interaction.
5. Think big
22% of business owners say they’ve developed new products and services this year. 86% of them say the coronavirus has influenced those innovations.
Business owners who once relied on foot traffic have had to rethink their marketing. Service-based businesses have had to reimagine their offerings to abide by social distancing guidelines. And many restaurants and retail businesses have had to reinvent their menus or products to support e-commerce and delivery. Many business owners say they have invested significantly more in virtual services and technology. Others have adopted a completely new business model to adapt to post-pandemic society.
Small businesses across the globe are making big changes—and those changes are paying off. One in 4 business owners says recent innovations have nearly doubled their revenue.
If you want to see success in 2020 and beyond, it’s time to think big about your small business.
Sample and methodology
QuickBooks commissioned Qualtrics to distribute a 25-question online survey to 965 people who currently own a small business. These businesses employ up to 100 people and have annual revenues of at least $5,000. All respondents were aged 18 to 65 and older, with an average age of 46.
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