Businesses leaders confirmed one fact about our shared new normal at the first of three Google virtual Small Business Matters Roundtable events on Thursday, Sept. 14: COVID-19 has made it essential for small businesses to digitize their operations once and for all.
Why it’s important: 93% of U.S. small businesses to medium-sized businesses (SMBs) felt an immediate downturn in customer demand, hours of operation and employee headcounts, a newly published Connected Commerce Council (3C) report in partnership with Google found.
The result: Many turned to the digital safety net.
- 85% rethought their digital strategy to help recover, the report found.
According to Jake Ward, President of 3C, taking on digital tools is a win-win strategy for small businesses.
“What we found was that there was a digital safety net,” he said at the Google event, “that the more small businesses use digital tools, the more likely they were to be able to survive the early days of the pandemic and to build a sort of resilience into their business model.”
- Essentially, Ward argues, digital tools – including videoconferencing, digital payments and productivity software – act as a “silver bullet” for millions of American SMBs.
The challenge: Although COVID-19 has accelerated the digital transformation of countless businesses in just 6 months, many SMBs face 2 critical problems with access, said Ward:
- Difficulty accessing the digital tools capable of boosting their business.
- Or, a lack of understanding in how to make the most of the digital tools available to them.
Despite this barrier, small businesses owned by people of color are more likely to leverage digital tools to make up for a lack of access to capital.
- In fact, Black-, Latino- and Asian-owned businesses all fall into the Digital Driver category, or businesses that are the most digitally savvy (at 46%, 41%, and 38%, respectively).
Key numbers: But, these businesses were also roughly half as likely as white-run businesses to receive aid through public loans.
The details: At the roundtable, one California-based business owner said that Black-owned businesses shuttered their doors at double the rate of white-owned businesses.
Together, the small business experts came up with a number of solutions to these obstacles to SMBs, including:
- Education that brings small businesses up to speed with new digital tools, trends and online opportunities.
- Technical assistance, where larger firms and nonprofits guide small businesses through big changes, such as digital transformation.
- More time and capital, 2 critical resources one West Coast business owner said was sorely lacking for the hardest-hit businesses.
One roundtable expert explained: Many under-resourced businesses lack the time – and money – to implement new technologies and strategies, especially in these precarious times. For them, it’s between survival or investing in themselves.
Next steps: Increase access to capital and digital education.
- Free resources, like the Grow with Google program, are vital. “Our program,” said Mistique Cano, Director of Policy & Public Affairs at Google, “has helped train over 5 million Americans, many of them small businesses, on digital skills to help them grow.”
- Meanwhile, grants would allow entrepreneurs to level up their business while covering their expenses.
The takeaway: The pandemic’s impact on small businesses was swift – and devastating. But with the right digital tools and time-saving technical assistance, they can survive – and thrive. Learn more.