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5 Key Takeaways from the 2020 Small Business Summit
Top thought leaders, policymakers, and entrepreneurs gathered on Zoom last Friday to discuss the future of small business. And the overall tone of the first-ever Forbes 2020 Small Business Summit was urgent – and dare I say hopeful – as they reflected on the pandemic’s impact so far.
The Summit took an American lens on the subject, tackling topics from the Paycheck Protection Program (PPP) to making community resources more equitable. And the event featured voices from the likes of Senator Cory Booker, Morgan Stanley’s Carla Harris, and Facebook’s Sheryl Sandberg.
With the lasting effects of the pandemic still unclear, these conversations couldn’t have come at a better time. There are more than 125 million small businesses worldwide, accounting for 90% of the global economy. And plainly put, we can’t afford to see them fail – especially not en masse.
So, in case you missed the event, here are the key takeaways you need to know:
“We identify with our small businesses. And they give life and vibrancy to our communities. And that’s worth fighting for.”~ Lisa Mensah, President & CEO of Opportunity Finance Network
Actively share your company values
Since March 2020, consumers are becoming more socially responsible with their money and gravitating toward smaller retailers whenever possible. “People right now are really paying attention to where they spend their money,” said Lauren Cooks Levitan, Faire CFO.
But they’re also increasingly selective on which companies they support – favoring ones that align with their values. Meaning, now more than ever, you need to share your company (and personal) values.
Katia Beauchamp, Birchbox co-founder and CEO, challenges: “How do we solidify our values and prove – as for-profit businesses – that we are socially responsible?” And the Summit consensus suggests your answer is pivotal in your business’ future.
Quick take: At the bare minimum, share your lived experiences, values, and social impact initiatives on your website.
Make sure everyone has a seat at the table
For local economies to thrive, we need our business community to reflect the community itself. And that starts by making entrepreneurship more inclusive.
Many small businesses, entrepreneurs, and business communities – particularly those that are predominantly white and male – blame their lack of diversity on the pipeline. But Ali Koplar Wyatt, co-founder of The Female Founder Collective, points out its “not for lack of numbers.”
Regardless of your industry, there are plenty of diverse candidates with the skill sets and experience your business needs. And rather than taking the closest or first-available candidate, you need to fill your pipeline with diversity.
Quick take: Diversify your pipeline with top candidates from all walks of life. (And create an equitable compensation program to start building intergenerational wealth.)
Look for alternative funding opportunities
Throughout the pandemic, the PPP program has failed to support much of Mainstreet America. And in the process, companies like Square have picked up the slack.
At first, Square sought to break down the complexity of the PPP into language that anyone could understand. But in the process, they realized just how many small businesses the program left behind.
Most of Mainstreet America can’t go to a bank (especially not the ones that the PPP program was partnered with) for a loan. They’re too small (meaning, too difficult) to underwrite.
So Square became an SMB lender amid COVID (averaging $11,000 per loan to primarily single sole proprietor businesses). And simultaneously, they have changed lending from a transactional event into one that happens in context. AKA unlocking access for more people to secure financing.
Other companies like Facebook are following suit, and many are even prioritizing groups who are traditionally unable to access capital.
Quick take: Companies like Square and Facebook are providing alternate avenues to secure capital.
Double down on technology
According to Sade Muhammad, Director of Representation and Inclusion at Forbes, when SMBs embrace digital tools, they perform 4 times better overall. And online sales platforms like Etsy and eBay provide “a low barrier of entry” way to stay in business while social distancing.
By leveraging these platforms, you can continue to serve your customers as well as reach a wider audience. But you can also find people who are looking to buy (where they feel comfortable shopping).
But the transition comes with 2 main obstacles. One, making sure your online and in-store inventories are merged. And two, training everyone on the new ways of doing things, so they’re synced on the new tech stack (and actually use it).
One way to do this is use Finale Inventory to track what you have in-stock and where, and Trainual to keep your team aligned and accountable.
Quick take: Focus on adopting technology that will provide an immediate return and be a solid long-term investment. For example, an inventory manager and training software.
All signs point to SMBs coming out stronger than ever
Square used a combination of public and private data to real-time industry insights across geographies. While venture capital and government funding often relied on data that was already out of date.
“We’ve seen a pretty healthy rebound across most industries,” explains Jacqueline Reses, Square’s Head of Square Capital. In fact, she reported all industries – save for transportation and restaurants – have already seen a comeback.
That’s because, as Etsy’s Dayna Isom Johnson explained, “the agility SMBs have is unparalleled compared to what big retailers can do.”
Unlike corporate America, small businesses don’t have the added weight that comes with size. So when they see what’s working or what’s missing, they can quickly shift to meet new demands and lifestyles. And throughout the pandemic, they’ve been doing so faster than big box stores.
For example, Hot Sam’s Detroit, a suit shop in Detroit, added Zoom meeting appropriate loungewear to their inventory seemingly overnight as people transitioned to working from home. Meanwhile, larger operations like Men’s Wearhouse have filed for bankruptcy.
Quick take: “The playing field, at this point, is being leveled,” said Lauren Stovall, Legacy Preserver at Hot Sam’s Detroit. “And small businesses need not despise that. We’re bigger than we think.”