The first week in May marks National Small Business Week in the United States. For the second year in a row, QuickBooks also declared May Small Business Success Month, and marked the occasion with events, a new survey of small business owners around the country, and advice for the small businesses we help power to prosperity every day. On May 19, QuickBooks hosted a Town Hall event focused on three key questions small business owners are currently asking:
- How do I combat inflation and keep costs down?
- How can I get funding?
- How can I increase online revenue?
The latest Small Business Insights survey commissioned by QuickBooks shows that inflation is currently their number-one concern, with 99% worried about its impact. When the more than 1,100 small business owners were asked where they currently need the most help, “making it easier to get loans” was the top response. Survey respondents said that increasing online revenue is the top priority for small businesses.
Emmy award-winning journalist and author Lisa Ling moderated the Town Hall event. Isabella Casillas Guzman, Administrator of the U.S. Small Business Administration, and Alex Chriss, Executive Vice President & General Manager, Intuit QuickBooks, answered questions submitted by more than 7,500 small businesses.
Getting a grip on inflation and cutting costs
The Small Business Administration (SBA) is the U.S. federal agency established in 1953 that provides access to a broad network of lenders, in addition to dozens of tools and resources to help navigate common business challenges.
The SBA was integral to the survival of thousands of small businesses during the pandemic—and continues to be. In 2021 alone, 5.4 million Americans applied to start a business—more than 20% higher than any previous year on record.
Administrator Guzman serves as the representative of the country's 32.5 million small businesses, telling Town Hall attendees that, “You are the giants in our economy.” She noted tackling inflation is one of the Biden administration’s top priorities.
“On an everyday level,” she said, “the SBA is trying to make sure that businesses have the capital to navigate [inflationary] challenges, have the advisory network to navigate these challenges, and also to take advantage of the opportunities being created.”
According to Administrator Guzman, those opportunities include the government’s investment in domestic supply chains as well as federal government contracts for small businesses.
“Across our capital programs, we are expanding our distribution networks and simplifying our products for our lenders and borrowers so they can be more accessible,” she said. “This ensures that there’s equity in revenue opportunities, especially where it comes to government contracting.”
The SBA offers free online tools, training programs, one-on-one counseling services, and funding to help owners start and grow small businesses. Administrator Guzman acknowledged the importance of digital tools for small businesses.
“We recognize that small businesses had to adapt during the pandemic in particular,” she said, “and [small businesses] said they increased their use of digital tools during the pandemic. We think that's an incredible positive because it can improve your operational efficiency.”
Adopting technology to cut costs (while also increasing cash flow)
Technology is also a key defense against rising inflation. Cutting costs is possible when you transition from manual, time-draining processes to automated tasks. Intuit QuickBooks helps small businesses effectively manage financial data, properly forecast cash flow, and be capital-ready as new programs are rolled out.
According to Alex Chriss, small businesses should start by conducting a risk assessment to identify areas for workflow improvement. Then they can adopt the right technologies to automate processes. Automating tasks is one of the best ways to help your small business:
- Increase productivity: When productivity is elevated, it allows you to focus attention on other money-making areas of your business, which helps combat inflation pressure.
- Close payment gaps: The ability to automate invoicing accelerates the process and helps businesses get paid faster, and keep cash flowing in. ”That float for a small business is just so painful because the work has already been done and vendors paid,” stated Chriss.
- Streamline finances: Automating financial tasks reduces the need for spreadsheets for inventory or cash flow, which equates to more time and cost savings. It also helps streamline operations broadly.
- Improve financial forecasting: Advances in artificial intelligence help businesses make more accurate and personalized financial predictions using up-to-the-minute, on-demand data. The ability to predict cash flow allows business owners to make better spending decisions as well. According to Chriss, it’s especially important to know your cash flow when things are tough. That’s the time to see all the way to slow down or reduce expenses going out, and speed up revenue coming in.
- Leverage existing client relationships: Automating client communications via platforms like Mailchimp keeps you close to existing clients, fosters loyalty, and promotes long-term patronage.
“When you automate basic, mundane tasks, it puts time back in your pocket so you can go out and find new customers or delight the ones you have,” said Chriss.
The 411 on funding
More than anything else, small businesses say they need access to capital.
The QuickBooks Small Business Insights survey reported that 65% of small businesses indicated they need the government to make it easier to get loans. During the pandemic, 64% reported that government lending to small businesses was “critically important.”
The purpose of the SBA, according to Administrator Guzman, is to make loans more accessible to small business owners. “The SBA also offers affordable capital and technical assistance that we think is invaluable to help businesses improve their efficiency and grow their revenues. And we are working on doing a better job to help connect small businesses to the SBA through broader distribution networks and through simpler processes.”
Today, the SBA has grown its base of capital providers that extends beyond banks and credit unions to non-profit mission-based lenders as well. The agency also has more than 68 district offices and over 1,300 resource partners available to support the nation’s small businesses.
For the first time ever, fintechs and the SBA partnered together via the Coronavirus Aid, Relief, and Economic Security Act, (CARES) to facilitate lending. The QuickBooks Capital product helped eligible customers access more than $1.2 billion in SBA-approved loans in 2020. With more small businesses relying on non-traditional lending today, the SBA and products like QuickBooks Capital are mission-critical funding resources.
“Our customers had all the data needed and necessary to be able to get access to relief funds. We made it drop-dead easy to look at data and complete loan applications,” stated Chriss.
Administrator Guzman added, “We went from just over 1,000 lenders to over 5,000 lenders, like Intuit, helping us with PPP—we want to get to that again. So we're really focused on making sure that the SBA can evolve and really meet this moment in the future; where more small businesses, especially smaller entities, and sole proprietors, not your typical SBA borrowers, can have access to our program.”
With QuickBooks Capital, eligible customers can obtain a loan using the accounting information already entered into their books. Customers can receive funds in a matter of minutes rather than waiting days, weeks, or even months working with traditional lending institutions. And it’s not just for larger-sized businesses: 78% percent of QuickBooks Capital customers are microbusinesses, or businesses with fewer than four employees.
Administrator Guzman added: “Technology helps businesses know when to be capital-ready…and allows them to access relief programs earlier. The SBA recognizes that it’s with technology companies that we were able to reach more businesses than ever before. We continue to see how we can get creative in partnering with technology companies within our core programs.”
Bolstering revenue requires an omnichannel approach
Increasing revenue to bolster cash reserves is critical to long-term business success. And that’s why adopting the omnichannel commerce model is a necessity. Most business owners understand the need to sell online. In fact, many small businesses report that increasing online sales is their number-one priority.
The QuickBooks Small Business Insights survey shows that omnichannel businesses—companies that have fully integrated online and offline sales—are very optimistic. Seventy-nine percent predicted growth over the next three months. Among brick-and-mortar businesses, only 47% predicted growth.
Chriss advised that businesses can leverage multiple marketing and sales channels to support business growth. “You have to expand across social channels because you just don’t know which one is going to work. You have to be selling and marketing across multiple channels. You just have to be out there.”
Don’t go it alone
While the small business community continues to deal with economic challenges, there is optimism. Nearly two-thirds of QuickBooks survey respondents forecast business growth over the next three months.
The bottom line is that small business owners don’t have to go it alone.
As Alex Chriss said, “The feeling of stress and isolation is prevalent in the small business community. So, the message I have to small businesses is that you’ve got thousands of people within Intuit ready to support you and your dreams. You’ve got the SBA at the ready with tools and resources. You are not alone.“
Missed the event? Watch it now.
If you missed this Town Hall, watch it on-demand here. Visit the QuickBooks Small Business Success Month Hub for more information, including the compelling stories of two inspiring small businesses told through photographs.
