Small businesses are the lifeblood of the American economy. According to Guidant Financial, a consulting and research firm, small businesses account for 46.8 percent of the workforce employed in the private sector. Running a small business comes with numerous challenges, and according to the Small Business Administration (SBA), only 50 percent of all small businesses survive during their first five years, while only a third make it to 10.
Nothing can hold a small business back like financial problems. Depending on the business sector, it may require a substantial upfront investment to launch a business. Also, the return on investment can take a long time to come. With substantial cash flows, larger companies can keep up with payroll obligations and maintain financial stability with relative ease. For a small company, if one large client fails to make a timely payment, the affect can be dire.
For many business owners and startups, loans are not always an option, particularly if they are still recovering from the impact of the pandemic. In such situations, alternative sources of funding might be critical to inject the much-needed capital. Alternative sources include venture capital, grants, crowdfunding, angel investors, and peer-to-peer lending, among others.
For a small business or startup, critical decisions must be made in terms of sales and marketing strategies geared toward customer acquisition. For example, today, virtual reality (VR) and augmented reality (AR) technologies are increasingly adopted by large organizations, and small businesses too can leverage their benefits. Small businesses and startups should consider employing VR and AR where possible to generate excitement among established customers and acquire new ones.
For customer acquisition, social media is often a good option. Today, between them, the leading social media platforms like Twitter, Facebook, and LinkedIn have billions of users. It’s no wonder that social media is a growing target for many marketers. Being more agile, small businesses can connect with audiences better than big organizations.
While social media advertising is gaining more traction, it’s also increasingly competitive. To build brand awareness and larger audiences, small businesses may need to focus on a multichannel organic marketing approach. While social media ads can potentially bolster organic growth, it may not be prudent for small businesses to compete with more established or larger companies when other organic approaches such as content marketing might bring a better return on investment.
Other technologies that smaller businesses or startups can leverage include artificial intelligence (AI), machine learning (ML), and data analytics. These technologies allow businesses to collect large volumes of data for business insights. In addition, AI and automation can help even small businesses to streamline certain repetitive tasks and cut costs while boosting efficiency. With big data insights, businesses, both small and new, can improve internal processes, marketing initiatives, and enhance the customer journey through personalization.
Gig workers or freelancers offer startups and small businesses a chance to save on costs associated with full time employees. For example, in 2021, the US had 59 million people engaged in freelance work, a number that is expected to continue growing in the years ahead. A small business can, for example, hire the services of a part-time freelancer to manage social media activities during the early phase of a particular campaign.
