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I Stand For Small BusinessWhat a year it’s been! As we approach the one-year anniversary of shelter-in-place orders, I can’t help but reflect on the hardships the US small and midsize businesses (SMB) community have faced. A new survey conducted by Bill.com offers an optimistic outlook from this resilient group. Our survey reported that instead of looking outside their companies for help, 75 percent of small business owners (SBOs) are taking matters into their own hands through innovative actions, such as:
Offer Discounts and Pricing Changes
My parents were agile small business owners before “agile” was even a thing. They knew when and how to offer effective discounts and pricing changes. Millions of small business owners (SBOs) quickly discovered the power of discount and quick pricing changes last year. They had no choice. An impressive 51 percent of SBOs deployed discount and price changes in response to shelter-in-place orders. These actions allowed businesses to retain customers, who were experiencing severe economic shock themselves.
Engage in New Customer Outreach
A discount and/or price change only works if the customer knows about it. That’s why almost one-third of SBOs reported that they engaged in new customer outreach. Simply put, once shelter-in-place orders kicked in, many small businesses could no longer serve their customers through traditional methods. In response, small businesses, especially brick-and-mortar ones, rushed online. Over one quarter (26 percent) of SBOs took matters into their own hands and engaged in new forms of customer outreach.
I recently had the pleasure to discuss #SMB digital solutions with GoDaddy CEO, Aman Bhutani and Square General Counsel, Sivan Whitely on the NYSE panel, “Digital Leaders: Helping SMBs Thrive.” Square helped thousands of SMBs move from selling in person to selling online. GoDaddy offered free marketing tools to help businesses pivot online. The #UnitedWeStand movement, launched by GoDaddy, educated business owners, shared online marketing tactics and generated over 120 COVID-19 special offers from more than a 100 corporate partners.
Introduce New Products and Services
With new digital tools like Bill.com, many small businesses were able to significantly reduce costs. “Dog walking service requests were impacted during the pandemic, so we had to work fast to offer new pet care solutions,” said Alec Davidian, Chief Financial Officer at Wag!. “With the help of digital technology solutions like Bill.com, we were able to serve five times more pet parents daily through new virtual services like Wag! Health, pet care advice and remote training."
Customer and Supplier Negotiated Payment Terms
In 2020, the focus was on saving costs and business survival. Businesses were in dire need of capital. Services like Square Capital - created to increase access to capital for small businesses, particularly those from under-served communities - saw massive increases in customer demand.
Entrepreneurs and their businesses have been upended by the coronavirus. In California alone, shelter-in-place orders were lifted, re-imposed, then lifted again. Revenue plummeted. But 23 percent of SBOs renegotiated their customer and supplier payment terms. In 2020, businesses simply needed to contain costs. However, in 2021, the survey found that the focus for SBOs had shifted to revenue generation.
Pivot To New Business Models
I believe that this combination of unique actions - discounts and pricing changes, new customer outreach, new products or services, and renegotiated payment terms - allowed many small businesses to survive and serve their communities. SBOs showed incredible resilience and creativity amidst severe, deteriorating economic conditions. Over the last year, 19 percent of SBO respondents said that they had pivoted to new business models. Products like accounts payable automation from Bill.com and moving from paper checks to ACH payments saved SBOs valuable time. In turn, businesses spent more time focused on customers’ needs and were able to pivot to new online business. SBOs showed and continue to demonstrate incredible resilience, creativity and stamina through the toughest of times.
Conclusion
As the one-year anniversary of the global pandemic shut down approaches, I salute the creativity, passion and resilience of the small business owner. I am encouraged by the shift from cost-cutting in 2020 to revenue-generation in 2021. The threat of economic uncertainty is, unfortunately, not over. But Bill.com’s recent survey reveals a strikingly different tone than a year before. We stand ready to help small businesses focus on growth in 2021.
Tools mentioned in this blog post:
- Bill.com: Account Payable and Account Receivable Solutions
- GoDaddy: Website, Marketing, and Email Tools
- Square: Square Capital (Small Business Loans) and Pandemic Support/Resources
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