SMBs and COVID
Three of the biggest fears, challenges or frustrations that small business owners in the United States have around adapting their business due to COVID include ensuring employees are able to work remotely, accommodating clients/customers through digital solutions, and shifting to business/operation models that they are not prepared for or accustomed to.
Ensuring Employees Can Work Remotely
- One fear, challenge, or frustration that small businesses are facing in regard to adapting their business due to the ongoing COVID-19 pandemic is ensuring that their workers are able to work remotely. According to the 2020 State of Small Business Report from Facebook, which was conducted in the wake of the pandemic, more than half of the small businesses surveyed (55%) say that they are unable to support remote work for the long-term, as they cannot endure employees operating from their homes "for more than a few days."
- More than one-third (35%) of the operational business owners/managers in the United States that were surveyed in Facebook's State of Small Business Report claim that they are unable to conduct work remotely. Around 42% of male and 28% of female operational business owners/managers in the country revealed that they currently cannot work remotely.
- As anticipated, there is significant variation by industry segment in the United States, according to the report. Only 17% of information and communication small business managers surveyed in Facebook's State of Small Business Report remark on not being able to work from home during the pandemic, compared to 67% of owners and managers of restaurants, cafes, and hotels.
- One particular issue that is impeding their ability to conduct remote work during the COVID-19 pandemic is than many small businesses have to interact with clients/customers face to face. Up to 51% of them claim that most of the interactions between their employees and clients/customers have to be conducted within the same physical location. Additionally, small businesses in the United States are experiencing difficulty obtaining the capital that is required to ensure their workers can operate remotely.
Accommodating Clients/Customers With Digital Solutions
- Another fear, challenge, or frustration that personal small businesses are facing in regard to adapting their business due to the ongoing COVID-19 pandemic is accommodating clients/customers digitally. This small business category is utilizing the internet much less than their counterparts to assist clients in adapting during the outbreak.
- Merely 24% of personal small businesses report expanding usage of digital payments, while just 35% are currently providing online services. More importantly, only 65% of them have made adjustments to accommodate their clients/customers.
- Less than one-third (23%) of small businesses in the United States are utilizing digital ordering tools during the pandemic, and 16% are using digital service delivery tools. Around 37% of them are using digital payment tools.
- The 2020 Small Business Digital Transformation report from Cisco revealed that 56% of all small businesses in North America, including the United States, are in the second stage (Digital Observer) of digital transformation. Only 11% of those small businesses are prioritizing talent sourcing and obtaining employee experience for digitalization. Also, 13% of them report that having a shortage of digital talent and skills is the biggest challenge they have in regard to digital transformation, while another 13% cite a "cultural resistance to change."
- However, more than one-third (32%) of small businesses in the United States are planning to invest in digital skills and talent in the next 18 months in order to attain organizational resilience. Around 32% of them are also planning on crafting a digital strategy that has clear objectives, while 33% are planning on enhancing their online sales or utilizing digital payments.
- Although digital tools cannot serve as a solution for all of the lost business small companies in the United States are facing during the pandemic, many are taking advantage of them in order to just stay afloat and avoid closing permanently.
Adjusting Operating Models
- One more fear, challenge, or frustration that personal small businesses are facing in regard to adapting their business due to the ongoing COVID-19 pandemic is modifying their operating models. Small businesses have to search for brand-new operating models that they are not accustomed to. Because of the pandemic, several small businesses in the United States have also been forced to alter their hours of operation and continue operating with fewer employees, and these changes are impacting business operations and local economies.
- According to Facebook's 2020 State of Small Business Report, 79% of small businesses have had to make adjustments to their operations in order to accommodate their clients/customers. Around 35% have expanded their usage of digital payments, and 23% and 24% of them have started offering home or curbside delivery.
- Furthermore, there are operational hurdles attached to health and safety restrictions/standards that have been put in place. The primary reason that small businesses have had to close during the COVID-19 outbreak has been government or health authority orders. Sustaining certain actions to limit physical contact with clients and customers, and even between employees, in the medium term is challenging, particularly for small businesses.
- Also, small businesses such as restaurants and retailers could adapt to the fallout from the pandemic by centering their product mix around high-value products, renegotiating terms with suppliers to protect their margins, adding more promotional activities, and providing temporary price reductions. Nevertheless, small businesses have less financial flexibility than their larger counterparts, which means that they cannot compete with them on promotions and pricing.
- A recent report from McKinsey & Company published in July 2020 indicates that these solutions are difficult to implement properly, stating that it will "require an economy-wide effort to provide financing, restore demand, and improve small businesses’ capability and resilience."
- Another report from biz2credit published in September 2020 stated, "Balancing the budget and being able to pay the bills have resulted from either decreasing cost of operations or promoting and relying on alternative ways for revenue."