If the Covid-19 pandemic was any indication, merchants across the U.S. demonstrated unprecedented adaptability as they scrambled to move their physical operations to the online space, and with profitable results.
However, when the pandemic first hit, many businesses were initially blindsided since they were poorly equipped to manage the extreme restrictions and shutdowns.
Support For SMEs Hard To Come By
Both small and medium-sized businesses were impacted the hardest when the 2008 financial crisis hit and it will be no different during this Covid-19 pandemic.
The U.S. Small Business Administration (SBA) published a report about the results of the Great Recession. What was discovered was that small business lending after the crisis was growing only 3.5% per year at robust banks, while it shrank by 3.9% every year at struggling banks.
This is a strong indication of what is to come during this health crisis and what lending would look like for SMEs. Outside of government programs such as the Payroll Protection Program, SMEs might want to consider seeking assistance via crowdfunding to stay afloat during and perhaps post-Covid.
The Winning PlayBook For Successful Businesses
According to a financial analyst company, Gartner, Inc., businesses that demonstrated the most resilience during the start of the pandemic were the ones who collaborated with reputable digital providers and also implemented automation within their business model.
Some incorporated social marketing by using live streams to generate their income. A survey conducted by the PNC Financial Services Group, Inc., found that 79% of business owners made necessary modifications in order to adapt to the crisis. This also included 33% of them incorporating work-from-home.
Businesses have also ramped up their use of technology so that what was once a “person-to-person” sales setup was converted into a virtual or online transaction.
As many workers eased into working from home, as much as 70% of full-time workers, many would be reluctant to return to the physical workplace. As many as 50% have reported an unwillingness to return to jobs that do not offer remote work, post-pandemic.
Since many SMEs have mobilized their efforts to shift their sales, communications, and sometimes, their entire business models online, these businesses have the positioning they need to launch crowdfunding campaigns. By doing so, they will attain the attention of both potential customers and investors.
“Equity crowdfunding” can enable customers to directly support businesses that are in dire need of capital. This type of fundraising is open to anyone, regardless of private wealth, to invest in private companies.
Not only do small and medium businesses stand to benefit from the capital they need to operate, but also they can widen their customer base through their fundraising offerings.
Customers win in that they will reap the benefits of their investments when these businesses go public in the future.
Success Demands That Businesses Experiment And Act Early
When asked, respondents in the aforementioned reports and surveys mentioned that their success during the crisis was largely attributed to having and utilizing their cutting-edge technological capabilities.
Having a culture that also values experimentation and quick action was also found to be critical to success. Almost 50% of respondents reported that their success was due to being the first to market their businesses with the latest innovations and the first in their industries to experiment by using the newest digital technologies.
These thriving businesses are also expedited in giving their leaders vital business information. They were also quick to “reallocate” resources in order to finance new initiatives.