Six Opportunities To Thrive During The Great Small Business Comeback
When it comes to the near-term outlook for small businesses, nearly everything you see and hear seems grim. And rightfully so: The pandemic has caused nearly 100,000 businesses to shut down permanently. Many of these businesses were the culmination of years of blood, sweat and tears and were pillars of towns and communities.
However, we believe that what lies behind the headlines and statistics is a massive, once-in-a-century opportunity to reinvent and reimagine what a restaurant, retail store, market or other local business could become: a leaner, more profitable, technology-focused concept with a more enjoyable experience for its patrons.
At HG, we meet with hundreds of small business owners each month, and a large percentage of them are not only optimistic about the future, but they’re also expanding to additional locations and new concepts. To echo this, a survey found that 83% of small and medium-sized business owners believe that their businesses will be more successful in 2021 than they were in 2020, and 93% are planning to hire this year.
Drawing on our experience working with small businesses, here are some of the opportunities that you can take advantage of to thrive in the coming years.
1. Improvement Of Systems And Operations
Amid nationwide shutdowns and closures, business owners and leaders have had considerably more time to review and understand what is working and what isn’t within their operations. Are any of your processes and procedures unsustainable? Do you sell low-margin items? Are any of your vendors uncooperative? Is any of your technology outdated? Now's the time to tighten your systems and operations.
2. Potential For Better Rental Prices And Lease Terms
We have a client who leased a bowling alley that closed during the pandemic, and he plans to turn it into a restaurant. He got a great deal on the space: The first six months are free, and then the rent is half of what the last tenant paid. He also got a one-year term with the option to renew.
Another client of ours took over a failed business's space, and the property owner knocked off 60% of the monthly rent price for a five-year commitment.
These are just two examples, but from what we've seen, many commercial property owners are looking for tenants, and there may be deals to be made. If your business requires space, start by looking for properties that recently lost tenants. If your business is in the middle of a lease, ask the property owner whether they are willing to renegotiate the rental price in exchange for a longer commitment.
Lower rent means less overhead and more profit to pump back into your business.
3. Available Talent
We ran a job posting a year ago and got 17 candidates in two weeks. Last week, we ran the same posting, and we had 300 applicants in 72 hours. With unemployment still high, there are more candidates in the field to choose from.
If your business is looking to grow, you have an opportunity now to bring on some talented new people. As Steve Jobs famously said, "It doesn't make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do."
Post your job openings on sites like Indeed, Glassdoor and LinkedIn. Your listings may get more eyes on them than ever before. If you're looking to spread the word organically, post your openings on your own social media channels and ask your friends to pass them around. Everyone has close acquaintances in their network looking for opportunities today.
4. Modern Technology
Many businesses have been rapidly implementing new technology since the start of the pandemic. Anything that limits physical contact and increases speed has taken center stage. For example, we've seen more restaurants using QR code menus and new contactless ordering, payment and pickup options. Many of these services were implemented for safety reasons, but they may stick around for the long haul due to customer preference and convenience.
With so much technology on the market, the biggest decision is where to spend your time in evaluating what would work best. To start, consult similar businesses to yours that have a good grasp on technology and are willing to share what they've done that has led to positive results.
5. Direct-To-Consumer Growth
In an effort to avoid the intermediary (think Amazon) and keep more of their profits for themselves, many retailers have been opting to sell their products direct-to-consumer. Overall, DTC sales were expected to grow 24.3% in 2020.
Even the increase in restaurants and small retail businesses using companies like DoorDash, Uber Eats and Postmates has been met with backlash due to their fees affecting profit margins. This has led many to begin to move toward better, more long-term solutions.
If your e-commerce business is selling primarily on Amazon, consider selling directly from your website instead. Platforms like Shopify and BigCommerce make this an easy feat. Once you start directing clients to your website instead of a third-party site, you'll keep more of the profits for yourself and have more control over the customer's experience.
6. A Return To In-Person Experiences
We’re social creatures. For many of us, no matter how much technology has entered our lives, nothing replaces being around other humans. Once the pandemic ends, live events, dining out and other activities will likely all see massive spikes. Some people are even predicting a repeat of the Roaring '20s.
To begin preparing, focus on what works while eliminating what doesn't, and wrap your business up in technology to help it move faster. Also, focus heavily on customer experience to ensure a welcoming, safe atmosphere and a refreshing experience that shows your commitment to the future.
When it comes to the impending small business comeback, playing the "wait and see" game is likely a recipe for failure. Now is the time to go on the offensive and prepare for what's to come.