How Small Businesses Can Succeed Despite Economic Challenges
By Joe Walsh, CEO of Thryv
Today’s news is filled with talk about inflation, a tight labor market and concerns about access to capital and the stability of banks. Small businesses (SMBs) stand to be especially hard hit, but many are thriving despite these obstacles. They’re adopting new tactics and technologies while continuing to be trusted resources to consumers.
Practicing Labor Hoarding Instead of Laying Off
The U.S.Chamber of Commerce’s data shows 10 million open jobs at the end of the first quarter of 2023, and a little more than half (5.7million) that number of workers who are unemployed. Amid this shortage, small businesses are using an interesting tactic to protect their own workforces. Their practicing “labor hoarding;" that is, heavily investing in retaining current employees even when layoffs might make sense.
They want to ensure their businesses can handle future demand. This trend is particularly notable in service industries like HVAC, plumbing and roofing, where a dearth of workers is more common as younger generations gravitate toward four-year college degrees and white-collar careers instead of vocational and technical paths.
Turning to Digital Ways of Funding
Much has been said of late about potential endangerment of local community banks and the risks posed to SMBs in obtaining loans. As an alternative, many SMB owners are turning to innovative digital tools that enable broader access to funding.
These include new sources such as Lendio, an online business loan marketplace; Fora Financial, a financing source available through the Thryv.com platform; and financial technology platforms such as Kabbage and OnDeck as well as more traditional sources like the Small Business Administration.
Navigating the Pandemic Hangover and Tax Burdens
Small businesses frequently have to deal with cash flow and tax concerns. While many SMBs use tools such as Quickbooks to track their expenses, there’s a rising trend of innovation in this area. These include firms such as Matt Remuzzi’s CapForge, a virtual bookkeeping firm in California; Mark Myers’ Peak Profit Solutions, a Florida-based expert on helping SMBs save money; and Mike Jesowshek’s JETRO and Associates, based in Milwaukee, who helps SMBs modernize their accounting practices.
Low-cost digital resources are also becoming more popular with SMBs, including podcasts, videos, eBooks and free online tools that offer guidance on taxes and cash flow management.
Automating to Unlock Value
Automation is another area of technology helping SMB owners battle increased costs — especially when it comes to administrative tasks. The technology also frees people to perform more meaningful work that customers value. Software platforms like ours empower small businesses to deliver a better customer experience.
For example, they can send automated reminders before arriving at a home offer to perform a service. This process is both a simple way to eliminate no-shows and a powerful customer touch point which also eliminates the cost of having an administrative assistant send a text or make confirmation calls.
Thriving through Technology
To some SMB owners, the prospect of adopting new technologies can be daunting, but implementing new solutions doesn’t have to be an all-or-nothing decision. It’s OK to take measured risks and rollout in phases.
Small businesses account for 99.9% of all U.S. businesses. They hold a significant place in our economy and need all the advantages they can get to succeed. Digital tools are key for them to not just survive but thrive — even in the face of today’s economic challenges.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.