During the height of the coronavirus pandemic, the outlook for small businesses was dire:
Though they’ve recovered significantly since that time, small businesses still haven’t entirely regained their health.
According to a report issued by the Small Business Administration one year after stay-at-home orders went into place in the U.S., the number of people identifying as self-employed has dropped almost 4%. The tally of business closures that will remain permanent is still up in the air, the SBA says, but many will stay shuttered or be permanently altered by the pandemic.
And while wages generally have been restored, and benefits consultants Mercer and Gallagher predict increases of 2-3% in 2021, companies are likely to take a “more surgical approach” to raises and bonuses, the SHRM article said. Companies will pay to retain top talent and return critical positions to their workforces, but wages in other positions may stagnate.
While reducing coronavirus cases and reopening the economy are critical to recovery, businesses can take steps to help themselves. Here are a few ideas to help businesses accelerate their journey toward recovery.
To help still-fragile businesses recover, American Express is sponsoring a Shop Small® summer campaign to encourage customers to patronize local merchants. This is a fresh take on the Shop Small® promotion the company has been running for the past few years right before the year-end holidays.
The campaign includes marketing materials for merchants, savings on American Express services for business owners, and promotion to cardholders to spend at small businesses all summer long. American Express invests in this initiative so businesses can ride a wave of increased visibility through signage and other marketing, and by promoting acceptance of the card in digital and in-person storefronts.
To learn more and access resources, savings, and insights for your business this summer, visit AmericanExpress.com/ShopSmall.
American Express is timing its campaign to help small businesses as the country emerges from the pandemic. In addition to taking advantage of that program, consider fine-tuning other elements of your business to improve sales, cash flow, and employee hiring and retention.
Start a website or upgrade the one you have. A great website will showcase your products so customers can buy online or visit your storefront with all the information they need to make a purchase. Make sure your website is professional-looking, user-friendly, and provides the functionality customers look for. Also be certain it is optimized for mobile use. And if you need to start a site from scratch or are looking for a new platform, consider one like WebCommerce that allows you to share your store and sell on Instagram, Facebook, and Amazon in a few clicks. Many webstore providers like WebCommerce also make it very easy to run online advertising campaigns right from your webstore dashboard, and include customer convenience features, such as support for curbside pickup and built-in payment acceptance of ACH and credit/debit cards.
Embrace mobile and contactless payment methods. In 2020, the total mobile point-of-sale transaction value was $1.02 billion, according to one estimate, and is expected to more than double to $2.49 billion in 2021. And use of contactless cards and mobile wallets is on the rise, partially due to pandemic-related health concerns, but also thanks to their speed and convenience. Contactless payment can provide a real competitive advantage to small and mid-size enterprise (SMEs), since adoption among them has been slower than in large organizations, Security Intelligence says. The potential increase in sales may make a technology upgrade for both mobile and contactless payments worth the investment.
Consider same-day funding of credit and debit card transactions. Pandemic or not, any company can end up in a financial bind when the time between sales and payment is too long. To speed up receipt of funds from credit and debit card transactions, look into same-day funding solutions. Same-day funding allows you to tap funds for credit and debit card transactions within minutes, seven days a week, by delivering funds from sales directly to the debit card account of your choice. Near-immediate funding of payment card transactions can help you settle invoices and buy supplies when you need to.
Pay employees instantly and frequently — and improve retention. In some industries, hiring and retention is proving to be a challenge post-COVID. Restaurants face a nationwide labor shortage, for example. And while the nature of retailing has likely changed forever, physical stores still need staff, and many retail employees stepped away permanently during the pandemic.
On a more macro level, SHRM reports the findings of a recent study that says more than half of employees surveyed in North America plan to look for a new job in 2021. Other research shows that a quarter of workers plan to quit their jobs outright once the pandemic subsides. One way or another, it’s clear that a significant number of businesses could face stiff competition for workers.
Offering more frequent pay is one way to stay in front of that competition. Now businesses have the option to pay earned wages and tips to employees in real time, using workers’ existing cards or bank accounts. Workers can choose how frequently they want to be paid – even daily if they like. Being able to pay them more often than the typical one- or two-week pay cycles also can help them stay afloat – particularly during tough economic times. It creates value for employees and contract workers, and helps your company seem more attractive even if another is paying the same wages, but not as frequently.
According to a proprietary “back to normal index” created by CNN and Moody’s Analytics, the U.S. economy is operating at 94% of March 2020 levels. However, small businesses are still booking 15.5% fewer work hours than immediately before the pandemic, so they continue to lag. Companies must take control of their recovery and seize resources and support wherever they can. By reinventing some practices for serving employees and customers and taking advantage of timely programs such as the American Express Shop Small® campaign, your company can get back to normal – or an even better, new normal – sooner rather than later.
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