by Steve Strauss
30 Jul 2020
What’s the “next normal” for SMBs?
For many people, it’s tough to find a silver lining in all of the bad economic news we have been getting this year, but if history is any indication, this dip is but a precursor to things that will be different, profound, better . . . and vital to your business.
Let’s remember 2008 for a moment (even if you would rather not!)
As you will recall, it too was a bad year, a very bad year. The housing bubble burst, Lehman Brothers went bankrupt, the stock market crashed, and unemployment soared – the economy lost 700,000 jobs in the last two months of that year alone.
One result of all of that bad economic news is that loans and investment money dried up. It was next to impossible to finance small business startups or growth as banks suddenly and understandably became very cautious about lending and underwriting.
But, as they say, “necessity is the mother of invention.” With small business funding all but impossible to come by, three intrepid entrepreneurs came up with a novel idea: Instead of asking a bank for a loan, entrepreneurs could ask the public for an investment.
And so, Kickstarter was born.
But Kickstarter wasn’t the only innovation born of that recession. What’s App, Dollar Shave Club, Venmo, and Instagram all resulted as well. And, while the economy was not what you would call gangbusters for the decade that followed, it was nevertheless the longest bull market and economic expansion in history.
Similarly, the Spanish Flu and resulting economic downturn of 1918-20 rang in the still famous “Roaring 20s.”
All of which is to say, business as we know it – err, knew it – and the economy are all poised to shift dramatically over the next few years. While it is impossible to say exactly what these changes will be, some trends are clearly going to be with us, and your business, as we enter the proverbial “new normal.”
These are the shifts that will most likely have lasting effects on your business:
Remote work is here to say
Plenty of pundits and prognosticators are predicting that “the office is dead.” But of course, it is not. People are social creatures and the need to congregate in order to collaborate, socialize, innovate, and work; the office will not be going away any time soon.
But that said, many small businesses have learned that they can get by just fine with their team working remotely – at least part-time – and the cost savings are not insignificant. For the smart small business, this means that it is important to take advantage of, and invest in, remote collaboration tools like Microsoft Teams, Slack, Salesforce, and the like.
Investing in training will be vital
With employees working remotely (at least partially), and Gen Z and the Millennials increasingly taking on more important positions in companies, the savvy small business will need to invest in training, as it behooves both the business and its staff.
- For the small business, a virtual workforce will require a new approach to employee support, education, and re-skilling, and that means increased and better training like that offered by my friends at Cornerstone. The small businesses that survive this moment will be the ones that are the most agile and able to quickly identify, develop and deploy skills amongst its workforce, and that, my friends, means training doesn’t cost, it pays.
- Training is and will be equally important for the company’s team members. Younger employees increasingly insist upon having jobs that develop their skills and talent. Again, training and re-skilling is what will make the difference.
Business as unusual will become more usual
The small businesses that initially survived the pandemic were the ones that were able to pivot quickly – the beloved restaurant that became a take-out mecca, the distillery that started churning out hand sanitizer.
Innovation, innovative thinking, and creative problem solving are what will be required in this new economy. The hunger and willingness to innovate that are the hallmarks of a great startup will be the hallmarks of the small businesses that don’t just survive, but thrive.
Safety and health concerns will remain paramount
Even after there is a coronavirus vaccine, the memory of this horrible moment will not fade quickly. As cleanliness habits have changed, consumers will expect that the small businesses that they frequent will continue to take sanitation seriously.
Stock up on that hand sanitizer!
The economy will bounce back strongly
A sudden and profound economic downturn like this one creates an economic rebound for several reasons:
- As we have seen, innovation thrives at times like this. There are companies, whole sectors even, that will emerge Startups of all sorts will thrive.
- With so many people out of work, a whole new breed of entrepreneur will develop – the accidental entrepreneur as it were. And there will be a lot of them
- Pent-up demand, once unleashed due to the end of the pandemic, will be unleashed
- Government spending will be lavish and directed towards economic growth
All of which means that the agile, innovative small business of which I have been speaking will have the opportunity to capture new business as it emerges.
This is a moment of history. The need for racial equality and corresponding economic opportunity for those that have been underserved and disenfranchised will only increase. The best small businesses will be those that understand that they will grow only to the extent that they help propel history forward.
The late, great radio announcer Paul Harvey once said, “In times like these, it is important to remember that . . . there have always been times like these.”
Yes, this pandemic is unique, but what is not is the knowledge that out of this downturn there will be winners and losers. The best small businesses will start preparing now.