“What is the future of small business?”
COVID-19 has brought many changes, many new and different ways of seeing things or identifying things. Being in quarantine, being almost forced to finally take a look at oneself has certainly been interesting. It has been especially interesting for to observe how the conversation among business experts has changed. I cannot keep track of how often I have heard – and continue to hear – the this is the time “to pivot”. So, I looked that word up. Interesting. Synonyms for this verb include “revolve, roll, rotate, spin, swing, swirl, swivel, turn, twirl, twist, wheel, whirl” and I am wondering: what exactly am I hearing people say? (I admit that I am a stickler for words and I do not understand Baseball language so that might be why I wanted to look up the meaning of this word) It appears the idea is that as entrepreneurs we need to stay grounded while twirling and changing direction. Interesting…
As a business owner, an entrepreneur, I am always paying attention to the state of small business. It is actually one of my passions to ensure that small businesses survive and thrive more in the future than they do now. I am passionate because I see small business owners as the ones with creativity, ingenuity, visions, and dreams. Not to mention, small businesses are crucial in the U.S. economy. As the SBA statistics show, the small business share of GDP (US) held almost constant from 1998 through 2004 at about 50%.
Small businesses often hinge on the dream of one visionary who then begins to work on making that dream a reality, thus there is purpose, passion and dedication. Small businesses, though also fail at a very high number. Sadly, according to the SBA:
“Four out of five establishments that started in 2016 survived until 2017 (79.8%). From 2005 to 2017, an average of 78.6% of new establishments survived one year. • About half of all establishments survive five years or longer. In the past decade, this ranged from a low of 45.4% for establishments started in 2006, and a high of 51.0% for those started in 2011. • About one-third of establishments survive 10 years or longer.
Although data is not available on firm survival rates, other data sources suggest that about two out of three establishment exits are the result of firm closures.”
Since COVID-19 was officially declared an emergency on “Small businesses employers bore the brunt of the job loss, with a decline of more than 17 percent” and “total private employment dropped by over 15 percent,” making the already urgent state of small business even more so.
There are many reason, why, in general small business survival is rather low – and we are not even talking about small business success, leave alone sustainability looking at this data. This is where clarity is needed: how can we avoid the death of visions, dreams, creativity and employment through small businesses?
As I mentioned in a conference presentation this past week, whether it is COVID-19 or any other day, the state of small business is in need of attention and guidance to not only survive but to thrive and become sustainable so that a legacy can be created, if so desired.
- The first step to that is: get a mentor to assist you.
- The second step is: educate yourself.
- The third step (and for some the most important) is to: follow a proven roadmap after objectively assessing where you are in your business and with your business.
This means taking inventory and identifying your business life-cycle stage and then moving from the theory of business life-cycle stages to the practical application: Follow a proven roadmap to sustainability without leaving out any details that could have your business falter a few years – or many years – down the line.
For sure, there are small businesses that survive. There are small businesses that succeed. There are fewer small businesses that reach complete sustainability. Success is always subjective while sustainability is objective. So, as a small business owner myself and as someone focused on guiding other small business owners to sustainability, being able to objectively assess my business and that of others is essential to ensure that we do not just survive, do not just succeed, do not just continue working and hoping but that we are able to create a legacy and exit the business when we feel like it.
There are many good small business experts and many have good intake assessments. Yet, most of them are skewed by the expert’s own niche and focus. That is understandable. In that, often an expert will realize into the process that the client has missed some steps along the way and that can be the building block that will make a small business crumble. Each building block on the road to sustainability matters, no matter how big or small, no matter how exciting or not – unless we complete every single on we may be making money, we may be considered successful BUT are we sustainable and can continue to contribute to the U.S. economy (and maybe the global economy) consistently?
Small businesses are essential for the U.S. economy and they are essential psychologically for those working on creating their dreams and serving others through their business. Yet, very few are able to objectively diagnose where they are in their business creation (lifecycle stage) and how to not waste energy working away at their dreams while running the danger of failure in the near or far future. Most tools out there right, advertised as “business assessments” are good assessments and they are usually subjective; focused on one or two of the causes for business failure or the niche that the assessment creator serves.
Thus, understanding the importance of small businesses it is most pertinent as experts, that we guide ourselves and our clients to their dreams and complete sustainability by using an objective assessment that helps identify all areas of the business that may have been neglected (building blocks) while mapping out the road ahead. Using that assessment and our proven expertise, as well as referrals in areas that we may not be experts in, can ensure the longevity of a dream and the sustainability of a business.
It’s time to take our attention to the state of small businesses to the next level and serve them, the economy, and ourselves to the objectively best ability. The way to pivot in that sense is to stop assessing individual areas of the small business and approaching it holistically. This is even more true now that COVID-19 has struck many of us and small businesses need our honest support more than ever – as does the economy.