COVID-19 upended our entire economy, but small businesses have been hit particularly hard by quarantines, lockdowns, and uncertainty. Every American knows the sadness of our favorite ice cream parlor or exercise studio closing. But amidst this fight’s pain, critical lessons learned will help small businesses survive the pandemic and emerge stronger and more prepared for the next crisis.
Many small businesses have stabilized or even expanded during COVID, thanks to the Digital Safety Net — a collection of free and low-cost online tools that simplify advertising, e-commerce, marketing, social media, financial management, and business operations. Connected Commerce Council’s recent Digitally Driven report found small businesses that embraced the Digital Safety Net early and fully integrated digital tools into their business anticipate four times better revenue for 2020 than businesses owned by digital skeptics.
The most successful “digital drivers” represent 35 percent of small businesses nationally. The good news is that 75 percent have adopted more digital tools during COVID-19 and more than half intend to use more of them in the future.
Of course, the Digital Safety Net does not guarantee that a business can replicate how business was previously done or that 2020 revenue will equal 2019 revenue. But every dollar matters to the Utah bedding company that doubled down on digital ads and targeted social media influencers to reach new customers; the Chicago spice business that closed its store and shifted almost entirely to online sales; and the New Hampshire florist that used e-commerce tools to transition to contactless pickup and delivery.
Steps to success
As we think about economic recovery and moving forward, how can we collectively do better for our small businesses and our communities? For starters, we must do more to ensure every small business takes advantage of the Digital Safety Net.
When asked about adopting new technologies, about half of small business owners said information and skills gaps prevented them from moving forward. Also, 45 percent were concerned about cost and return on investment. Given the data about small business digital success, that’s way too many concerned business owners who need education and support. We can do better.
As we advance, it’s vital that small businesses dig deep and carefully identify their goals. Businesses need to ensure they invest in the right digital tools — not the most popular or least expensive.
Technology companies must help small businesses determine which tools they need and provide confidence-building skills training and user-friendly support materials that encourage business owners to take the digital plunge. And policymakers must increase funding of small business resources and create public-private partnerships to address access and education barriers that small businesses experience, particularly during tough economic times.
Leading the way
Finally, policymakers must recognize that America’s largest technology companies provide so much of our Digital Safety Net — big brands like Google, Amazon, Facebook, QuickBooks, Zoom, and Microsoft. Large companies like these have the scale to offer free and affordable technology to millions of small businesses in need.
When Congress and the Trump Administration attack leading digital companies for being too big and successful, they risk undermining those companies’ business models that today support free and low-cost tools like Gmail, Amazon Marketplace, Facebook, Instagram, and so many others on which small businesses rely.
Will these companies continue to invest in small business tools under continued threat to break apart their business by a government that doesn’t understand the modern digital economy? Will the new broken-up companies provide the same level of service or the same affordable prices?
One pandemic lesson is that with the right tools, small businesses are incredibly resilient. Their futures depend on how quickly they adopt digital technology, how well they use new tools, and whether the government will allow big companies to continue offering them support.
The small business game was already changing before COVID-19 inflicted so much pain on our society. Now it’s up to Main Street small businesses to continue embracing digital tools and everything they offer to be strong and resilient to survive the COVID pandemic, and prepare for the next challenge.