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Study: SMBs Expanding Digital Sales, Business Operations to Fuel Growth Post-COVID
The impact of COVID-19 on SMBs is quite apparent. The U.S. Small Business Administration reports that SMBs account for 99% of all U.S. businesses and employ roughly 48% of all U.S. employees.
While the COVID-19 pandemic is having a massive impact on business operations, it has shown that digital business solutions play a crucial role in sustaining SMB operations in the future. This investment in digital business solutions will ultimately position SMBs for better growth in the future.
In a recent survey conducted by SMB Group, in association with Sage Intacct, entitled: “Impact of COVID-19 on Small and Medium Businesses,” 500 U.S. SMBs with 1-2,500 employees were surveyed in March 2020. The goal was to determine how deep and broad of an impact COVID-19 has had on American SMBs while detailing how these implications will affect them through and after the crisis.
Here are a few takeaways from the survey that highlight the lingering impact of COVID-19 on SMBs and how it has fueled an increased focus in online and digital tech investment to help limit the pain.
Businesses Unsure of Lingering COVID-19 Impact
More than three-quarters (77%) said that COVID-19 has had a moderately negative impact on their business, or worse. Twenty-seven percent said it had an extremely negative effect.
Half of the respondents (50%) expect the impact of COVID-19 to worsen over the next six months, while 43% expect it to improve. Only 8% expect the result of COVID-19 to remain the same in their business.
More than a third (35%) of survey respondents project a revenue decrease of more than 50% over the next six months. Two out of five SMBs (41%) project revenue decreases of up to 30%. Only 9% of respondents project revenue decreases between 1% and 10%.
COVID-19 is Hitting Very Small Businesses the Hardest
Among the 75% of businesses that are negatively affected by COVID-19, the smallest companies are affected the most. On average, more than a third (38%) of companies with under 20 employees said that COVID-19 is having an extremely negative impact on their business.
The survey suggests that these micro-SMBs lack the cash flow and capital necessary to see them through an extended period of reduced — or no — sales. Therefore, close to three-quarters (72%) of SMBS have cut employee hours, had layoffs, or conducted a mix of both. More than one quarter (26%) have already — or plan to — lay off employees.
Only 44% of the SMBs surveyed said they have no plans to lay off or reduce hours for salaried employees, while 39% said the same about their 1099 contractors.
New Normal Leading to Expanding Online Sales, Operations Capabilities
More than half (51%) of the respondents said they are currently increasing their use of online and digital sales channels, marketplaces, websites, and more for their goods and services. Roughly a quarter (22%) said they plan to increase their use in these channels.
Some of these SMBs are already seeing results from their initiatives. One-third (33%) reported that their increased use of online channels resulted in more sales through these channels.
The pandemic has also seen an uptick in solution adoption from digital laggards. While the majority of SMBs were already using many of the most necessary solutions before the epidemic — such as cloud-based business apps (68%), remote IT (65%), and cloud-based security (62%) — one-fifth of respondents plan to adopt such solutions.
This signals how SMBs understand that now is the time to invest in digital innovation for their business’ sustainability.
These takeaways only scratch the surface of the complete survey. Get your copy by downloading the report here.
Brian Anderson joined BrainSell as the content marketing manager, but unknowingly became our in-house troubadour as well. Armed with his natural affinity for words and editorial experience, Brian’s ability to generate high-quality content is unmatched.View Posts
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