Many small businesses — if not all — are also entrepreneurial ventures, even if the owners and founders aren’t card-carrying members of the Silicon Valley elite. It turns out, though, that they share many of the same survival instincts that help both thrive under pressure.
Today’s small business leaders and entrepreneurs face a daunting future: driving operational efficiency while also tackling macro challenges like geopolitical instability, supply and energy disruptions, and significant economic uncertainty — all of this on the heels of a global pandemic.
With that in mind, we turned to academia to get a pulse on how small business entrepreneurs are faring.
Educating the new wave of entrepreneurs
Richard Bliss is a professor of finance at Babson College and the National Academic Director for the Goldman Sachs 10,000 Small Businesses Program. The initiative, which launched in 2010, has helped more than 12,000 businesses scale since they began their work. And that means Bliss has a unique bird’s- eye view of how entrepreneurship — and entrepreneurs — have changed in the last decade.
One thing that’s been inspiring to watch, says Bliss, is just how resilient many of these small businesses proved to be following the global pandemic.
“People continue to launch businesses and in fact, there were more new businesses formed in 2021 than ever before,” he explains. “I think what we've seen with our small businesses is that they've proven themselves, even facing considerable challenges over the last several years. They certainly don't have the resources that a big company has, but I think they're much nimbler and able to pivot quickly. And we know for many of them that that's what they did because they had to.”
Bliss says he sees small businesses work miracles in many different, unexpected ways, and that’s often without a lot of formal business education.
“But to me, that's encouraging. Because they've managed to survive, in some cases, they've thrived without the basic tool kit that our sophomores or first-year MBAs [at Babson] get. And what we've seen is that when you give business owners that basic tool kit through simple training, they just take off.”
Marketing’s digital revolution
The Goldman Sachs program aims to give small businesses the skills and tools they need no matter what the current economic climate. And Bliss has seen a few longer-term trends that he thinks small businesses should be most aware of today.
The first is just how much marketing has changed in a decade.
“Ten years ago, I would have guessed that if you polled small businesses, half of them had a website, and now it's probably closer to 95%,” he explains. “We still run across businesses that use billboards, that use direct mail, that use radio advertising. But even they understand that there's a different way to reach people today. And I think that's where they struggle because it's something that's changing so fast.”
It can be even more of a challenge for small businesses to compete in digital marketing/social media world when they have limited resources to manage the day-to-day of their business, let alone in a fragmented media marketing world.
“When I was in the corporate world, if you needed consulting or advice, you knew who to go to. But small business owners don't necessarily have that.”
A result of that, says Bliss, is that the quality and effectiveness of digital and social media marketing campaigns can vary wildly. Without dedicated marketing expertise, they don’t always hit the mark. And marketing activities can be hard to prioritize for a resource-strapped small business.
Bliss says that while a larger business might have teams in-house to counsel, small businesses have a different kind of asset.
“One of the things that we've really pushed is the community of small business owners — there's your resource. Our alums have access to more than 12,000 other like-minded small business owners. Any questions you have like: Is this a good tool to use? Is this a good organization to partner with? Is this a good person to hire? There's no better resource than your peers.”
Operations and processes aren’t just for big businesses
Marketing isn’t the only challenge. The processes that make businesses run — operations management — are also a tough nut to crack.
“The preponderance of our small businesses are service businesses,” Bliss explains. “And service businesses often don't think about operations. But I think what we're seeing is the acknowledgment that operations are critical for any business.”
The pandemic pushed more small businesses to think about these issues, and it came at a time when inexpensive technologies could go a long way in aiding owners in their decision-making processes.
“This is where I'm seeing technology come along that can help people look at their operations and make them more efficient. Whether it's customer relationships, inventory, or supply chains, it’s now feasible for small businesses to manage these things using new tools.”
The remote work question continues
We all know that remote work was on the rise pre-pandemic and was catapulted into the mainstream almost overnight. But it wasn’t so easy for small business owners. In fact, it’s been quite a haul and a crash course in resilience.
“Many companies didn’t have the infrastructure to facilitate remote work. And they didn't necessarily have the technical skills either. But again, they figured it out,” says Bliss.
For small businesses right now, Bliss argues that the biggest challenge is getting people and keeping good people. “In many cases, they can't compete with the compensation, professional development and career trajectory that a big company can offer. But what they start to realize now is that they can be more flexible with remote work in some cases.”
He explains why the challenge for small business leaders is unique in these circumstances.
“An entrepreneur identifies opportunities, marshals the resources to capitalize on those, and then provides the leadership to make it all happen,” he says. “It's that middle piece that is driving this necessity to be flexible. One of the most important resources is people. And for small businesses, their people really define who they are as a business.”
The massive amount of change that small business owners have had to endure, and embrace isn’t likely to slow down soon. But according to Bliss, who educates hundreds of business leaders a year, they’re ready for the next challenge. Pandemic or not, it’s in the lifeblood of small business owners to be both flexible and resourceful.
“When you do a lot of work with big businesses, you take for granted a certain level of financial cushion or financial flexibility that a lot of small businesses don't have,” Bliss says. “But I am endlessly surprised by the willingness of small business owners to sacrifice and make decisions that may hurt personally but benefit their employees and keep their businesses alive.” The pandemic laid bare this level of commitment, and the economic uncertainty we currently find ourselves in is just one more hurdle in the day in the life of a small business owner.