Five Reasons to be Excited for the Future of Small Business
Despite the challenges small- and medium-sized businesses have faced throughout the pandemic, there are reasons to be optimistic about the future. From Benin to El Salvador to India, read about five reasons to get excited about what’s ahead.
At this point in the COVID-19 pandemic, the challenges businesses face have been laid bare. For many companies around the world, these included mass layoffs and closures, uncertainty about the duration of the pandemic, and financial fragility.
But small and medium businesses – the small groceries, cafés, and shops that often form the backbone of our communities – face their own unique set of challenges.
The Future of Small Business by the Numbers: Obstacles Entrepreneurs Face Worldwide During COVID-19
Small businesses form the backbone of emerging economies and, according to the International Labor Organization, generate up to 90% of employment in places like Sub-Saharan Africa.
At the start of the pandemic, small business closures rose to more than 50% in some countries, while women-led businesses were 7% more likely to close.
TechnoServe’s COVID-19 Impact Report shows how, in the last year, many of these businesses struggled with a lack of access to markets, supplies, and finance.
Although the situation has improved for many businesses since the first quarter of 2020, they still face lingering economic pain and the ever-present uncertainty of the COVID-19 crisis. As these small businesses grapple with the challenges ahead, here are five reasons to be optimistic about this critical economic sector.
1. Communities Rallied Around Small Businesses During Challenging Times
During the height of the pandemic, financial challenges came front and center in the pandemic as many small businesses shuttered. Even temporary closures had a drastic impact on balance sheets.
For some small businesses, this meant cutting employees, instituting furloughs, or decreasing hours of operation. These changes impacted businesses, employees, and local economies.
Now, things are finally turning around in some places. Many small businesses saw their communities rally around them during the pandemic, providing the support they needed to stay afloat financially during such a challenging time.
When fears of the COVID-19 pandemic reached the community of Natintingou in northern Benin, they created a new problem for Djamaloul Dine Alidou.
Alongside his wife, Safiatou Suery, he runs a small agri-business, selling eggs, chickens, and guinea fowl to local residents from the couple’s farm. But with fears of the virus rising, shoppers stopped visiting the farm.
“I was very panicked about having all of my products in stock with no market to sell them in. I also had to face the expenses of buying feed and paying salaries,” he recalls as he thought about his declining customer base.
But with the encouragement from his customers and support from his business advisor in the BeniBiz program, Djamaloul developed a new people-focused strategy for reaching his customers. He started offering home delivery of the eggs and poultry, using strict safety protocols, to customers still eager for his products.
During the course of his training program, Djamaloul learned essential best practices and walked away with a skill set to support his customers stuck at home:
- How to use social media and WhatsApp to share recipes with existing customers
- Safety recommendations to protect his customers during his home visits
- An effective marketing strategy to sell online and share information with his clientele
As a result of these different strategies, and his customers’ commitment to supporting his business, Djamaloul has been able to maintain his monthly sales levels despite the disruptions to the local economy and shopping behavior.
“I am very encouraged to have regained my customers – and reached new customers – through my new sales strategy,” Djamaloul said.
2. Going Digital Will Provide Essential Benefits for the Future of Small Businesses
The pandemic forced many small businesses to rapidly transition to some level of digital operations. In many countries, travel restrictions prompted a shift to online ordering, supply procurement, or marketing.
And while taking up a rapid digitalization is often a challenge, there are business benefits in the long run.
According to OECD research, small businesses that can make rapid and agile changes to their approach can:
- Become more resilient to shocks
- Enhance productivity
- Meet changing customer expectations
In El Salvador, entrepreneur Roberto Landaverde took his business – a school for deaf people – fully remote in the pandemic, and saw returns he hadn’t dreamed of. The school went from a membership of 40 students, to having 80 regular students.
For the first time in four years, Roberto began to pay his own salary from the profits of his business, and his company is now more orderly, both administratively and financially. “I learned how important it is to be prepared for everything,” he says.
“In the face of the pandemic, we had to come up with new ideas to survive – and we did it.”
Sign up to watch a webinar featuring the inspiring story of TechnoServe client and small business owner Roberto Landaverde – in his own words:
3. Support Helps Small Business Owners Learn to Manage Stress, Uncertainty
The pandemic brought mental health, stress, and wellbeing challenges for leaders and employees as schools closed, work hours grew longer to compensate for fewer employees, and stress rose.
The uncertainty was a challenge in and of itself. Many were left feeling overwhelmed and unsure of the path forward. Elizabeth Jeremiah is a 24-year-old business owner, mother, and wife living on the outskirts of Nairobi. “When COVID-19 struck, I didn’t know what to do, and that caused me a lot of panic and stress,” said Elizabeth. “I was struggling to keep my business running, and I almost closed down due to the financial hardships.”
Women also often shoulder a disproportionate amount of unpaid care work within their families, which makes running a successful farm or small business all the more challenging.
TechnoServe stepped in to fill the gaps and provide support and advice, enabling entrepreneurs to learn how to cope with uncertainty. By combining financial support with timely technical advice, the burden of uncertainty can be lifted. The mSPARK program is helping 30,000 entrepreneurs – 70% of whom will be young people, and 60% women – in and around Nairobi, Mombasa, and Kilifi to keep their micro-enterprises afloat so they can continue to serve their communities – and allowing small business owners to take a breath.
“A repayable grant will be a lifesaving opportunity, as I will have the funds to stay afloat and not have to close down my shop,” added Jeremiah. “Being trained on how to navigate through such a crisis will allow me to get out of it better and stronger.”
4. Better Opportunities for Diverse Entrepreneurs Offers Hope to Small Business Owners
The world is entering a new era of diverse entrepreneurship: More women, more young people, and more entrepreneurs from a diversity of backgrounds are entering the arena as barriers to entry fall. This means a readjustment in how we work to find, fund, and support the next generation of diverse entrepreneurs is needed.
Globally, women own just 15% of privately held agricultural land, and women’s assets are more likely to be sold than men’s in times of crisis. Following this crisis, it will be important to work with civil society and governments at all levels to ensure that women have equal access to the same resources men have.
Read more about how TechnoServe promotes women’s economic empowerment.
5. Future-Proofing a Small Business Helps Entrepreneurs Meet the Next Challenge Head-on
The COVID-19 pandemic, despite its innumerable tragedies, brought an inspired sense of resilience to the work being done by entrepreneurs around the world. As entrepreneurs around the world build resilience in the face of this crisis, the tide is shifting towards hope for small business owners.
After the pandemic forced many businesses to sell online – even if they weren’t ready – many struggled to stand out from the competition. The Strive Community will help five million small business owners grow resilient and profitable online businesses through interactive mobile-first training.
For entrepreneurs trying to make their way in the post-pandemic world, this focus on resilience to any kind of challenge will be crucial as disruptions become increasingly frequent. TechnoServe has developed a business survival toolkit to help business owners manage these challenges through the different stages of the pandemic.
You can help shape the future of small business by supporting innovative entrepreneurs. Join the fight to end global poverty:
