Despite the uncertainty of the past year, experts believe there are reasons for business owners to be optimistic about the future.
Here's what you need to know:
- Despite uncertainty, experts think there are plenty of reasons to be hopeful
- Connection and communication with customers is key
- Expect consumers to place an even bigger emphasis on value
Although 2020 has been a challenging year for many small businesses, especially those operating brick-and-mortar locations, there are still some bright spots. The National Federation of Independent Business (NFIB), a nonpartisan, member-driven group for small and independent businesses in the United States, reports that the NFIB Optimism Index rose 3.8 points to 104.0 in September. Despite the fact that earnings trends over the past 3 months improved 13 points, some uncertainty remains. In fact, the NFIB Uncertainty Index increased to 92.
What does 2021 have in store for small businesses?
We talked to 3 experts to find out. (Spoiler alert: the future could be brighter than some expect.)
Scott Steinberg, Futurist and Trends Expert
Steinberg acknowledged the challenges that many small businesses face but predicts that many will find ways to persevere. “It’s certainly going to be a time of uncertainty and growing unpredictability, but small business owners are nothing but scrappy and resilient,” he said. “Times of upheaval present opportunities for change.”
“The key in all of this is to keep you ear to the ground and design your operations to be nimble and able to pivot on demand.”
Owners that are adaptable and agile are poised to thrive. In some ways, he said, the pandemic served as a reset button and leveled the playing field between large and small businesses. “Who is best attuned to the needs of a local community?” he asked. “Small business owners, although the key in all of this is to keep you ear to the ground and design your operations to be nimble and able to pivot on demand.”
Catering to local needs can give smaller operators a leg up on national or multinational brands, Steinberg added. For instance, a small local bakery in North Carolina could create Cheerwine-flavored desserts in homage to the beloved local soda flavor. “I guarantee you somebody on the national level is not catering to those audiences,” Steinberg said.
Heading into 2021, he anticipated that customers will place an even bigger emphasis on value. “Value isn’t always about lower prices,” he added. “Sometimes it’s about getting more for your money and feeling like someone has gone that extra mile to earn your business, all spaces where small business owners can excel.”
Pamela Slim, Cofounder of Mainstreet Learning Lab
Slim advised brick-and-mortar businesses and professional service businesses such as lawyers, consultants, and coaches. She’s bullish about the small business outlook for these businesses in 2021, especially for operators who are flexible and resourceful. “There are some restaurants here that have been really creative in how they have supported their community,” Slim said. She pointed to República Empanada, a restaurant in her Mesa, Arizona neighborhood that used its dining room as a collection center for supplies to support the Navajo nation. “It makes us love them even more,” she added.
Several gyms in Slim’s community also got creative by quickly pivoting to virtual fitness. “Those businesses that did well were able to maintain connection and communication with their customers,” she said. “If you haven’t been connected with your customers. They may have already begun to build relationships with other businesses.” Operators who assigned blame or took a ‘wait and see’ approach didn’t fare as well. “There just really is not time to assign blame or wait for something to change,” Slim explained.
Slim pointed out that the pandemic nudged many small businesses to create an e-commerce website or improve their existing website. “Eventually, they could end up in a better position, not only meeting the needs of the local community but opening them up to folks all over the country or all over the world,” she said.
Mike Glauser, Executive Director at the Huntsman School of Business at Utah State University’s Center for Entrepreneurship
Operators who understand business fundamentals but are willing to pivot as needed are most like to flourish.
Like Steinberg and Slim, Glauser is optimistic about small businesses heading into 2021, especially once there’s a vaccine. “People will be excited to get out,” he said. “I think the opportunities for business are going to be fabulous.”
In Glauser’s research on successful small businesses, he’s noticed that the successful, long-term businesses tend to have a few things in common. “You have to have a really strong purpose,” he said. “Why are you doing this? What need are you trying to meet?”
Glauser said successful small business operators also tend to look at resources first and money second. For instance, Glauser points to the founder of Skratch Labs, which makes hydration products for athletes. “He bought an old funnel cake cart and turned it into a burrito cart and sold homemade burritos and gave out his products,” Glauser said. “The money he made paid for his marketing.”
Customer service will key to small business success in 2021 and beyond, added Glauser. “Having satisfied customers is not enough,” he said. “Someone that loves you and what you do will be far more loyal to you [than someone who’s merely satisfied].”
Operators who understand business fundamentals but are willing to pivot as needed are most like to flourish. “If they follow these practices and they want to grow, we think they all can create jobs early in the first quarter and second quarter of next year,” Glauser said.