On How Technology Can Help Save Small Business
Being a small company is hard. Building a brand, attracting employees and making rudimentary business decisions can be challenging for small, lean teams. It is also particularly hard to weather the ups and downs of a pandemic, whereas larger companies are often shielded from the volatility and can weather the storm without the additional headaches that plague small companies. Small business doesn’t just mean small venture-backed tech startups. Rather, small business incorporates all the family-owned companies and stores under its umbrella. Often it is the case that these business owners are expected to make decisions about technology, purchasing and real estate that extend beyond their core competencies in whatever field their business operates in. Traditionally, there haven’t been any solutions that could offer these companies a lending hand and provide leverage so these owners could focus on their core business strategy and operations.
Small business owners have gotten a taste of technology innovation over the years. TurboTax enables small businesses to effectively manage finances and run their internal accounting processes more effectively. Shopify lets small retailers set up beautiful and complex stores online. Google Adwords and Facebook allow companies to buy targeted advertising that lets them grow their audience through digital marketing. Despite these enhancements, there is still room for growth for technology that can help level the playing field for small businesses.
The biggest constraint on small companies is time. Imagine a platform that performed routine “check-ups” or audits on what these companies were using and buying? That would be a massive opportunity to tap into the millions of small companies around the US. Capterra (acquired by Gartner) is a notable solution today that helps companies identify the right software that suits them. You go to the doctor once a year, shouldn’t your business get a similar exam to make sure it’s operating properly?
Some of the key areas where technology can level the playing field include:
- Purchasing
One of the most impactful ways large companies to thrive is in the economies of scale they are afforded with procurement. This can come in the form of traditional purchasing that they need to keep their businesses running like paper goods and office supplies, but it can also apply to things like technology and more innovative solutions. Ultimately, technology can not only help by creating buying power by pooling offerings for these small businesses, but these companies could use help discovering the best solutions they should be considering, based on the industries they operate in. Negotiating one-off SaaS contracts is quite time consuming and can be a long process, and small companies don’t have the bandwidth to go through the long RFP process bigger firms do. Call it negotiation or purchasing agent as-a-service. Procurify is one solution that helps with vendor management and end-to-end purchasing workflow today.
- Hiring
If you speak to any business owner today, particularly one with intense manual labor or service as a component (trucking, logistics, energy, construction) you’ll hear echoes that they are constrained not by customers they can acquire, but by the number of people they can find to do the work for them. Similarly to ride-hailing and food delivery, these small companies may need to shift their focus to on-demand labor to help fill the gaps. Jobble is one platform that does exist today, which can help companies temporarily close the gap by providing on-demand labor.
- Liquidity
Many business owners aren’t experiencing a business model problem, they’re simply experiencing a cash flow problem given the current economic climate during COVID. Instead of going back to the bank to get a loan, they could benefit from additional forms of liquidity that could allow them to keep their businesses afloat and pay employees until things reopen. Some companies, such as Unlock are offering technology-enhanced sale-leaseback solutions that allow owners to tap into what is often their most valuable assets — their real estate, and immediately liquidate for a major cash infusion. There is also an opportunity to use creative financing strategies and capitalize unique assets such as long-term contracts with high-quality customers to provide even more liquidity to fuel growth.
- Learning
One key area where big companies often win is in being able to provide its employees with access to abundant learning opportunities. Education and growth is an important component that employees consider when choosing the firm they want to build their career with. If smaller firms could overcome their limitations by offering technology-enabled learning and development tools, this would be a huge opportunity to provide its employees with the opportunities often only afforded to larger firms with dedicated departments for such endeavors.
- Employee Utilization
Smaller companies don’t often have the robust HR and employee management infrastructures that big companies are able to benefit from. By utilizing tools like T-Sheets, employers can make decisions around hiring and understand where their teams are best utilized to better streamline their operations and maximize the production of their teams.
Beyond these tools, the future is bright for technology options to power small businesses. The rise of API’s will allow small companies to plug into larger platforms and extract data simply by writing a few lines of code. In addition, the rise of no-code solutions will help smaller companies provide sophisticated technology to its employees and customers without having to hire massive teams of developers to do it.
As Marc Adreessen famously proclaimed — software is eating the world. Small businesses are going to have to get smart on technology. If they start with the few key areas mentioned here, they will certainly be on the right track.
