America is slowly reopening for business. According to the official guidelines released by the White House, as long as your state or region has had 2 weeks of declining COVID-19 cases and your governor is supportive, you can begin transitioning back into regular business operations.
Whether the timelines are too late, too early, or just right is yet to be seen. What is certain is that this crisis has flipped many industries on their heads. Some will never recover. Others have found ways to thrive.
This report will examine the current challenges facing our nation’s small businesses and highlight some of the industries that are primed for major growth due to the complex situation we’ve all found ourselves in.
The Struggle Is Real
A survey published by the US Chamber of Commerce found that about 25% of our nation’s small businesses have shut down due to the pandemic. Of the businesses that remain open, 40% believe they will also have to close their doors within a few weeks.
While social distancing requirements and government-forced closures account for many of these closures, plenty of other businesses are reeling from precipitous revenue declines. These factors combine to make life miserable for many small business owners, with 40% feeling distressed about their cash flow.
“Regionally, small businesses in the West (where the COVID-19 outbreak was first reported) are a bit more pessimistic than others,” states the survey’s official summary. “Just 20% agree the US economy is in good health (compared to 24% in the Northeast, 25% in the Midwest, and 29% in the South). Across industries, businesses in the service industry are deeply concerned about the economic environment.”
When all industries are accounted for, 84% of the survey’s respondents expressed concern about how the pandemic will hurt their small businesses. Common efforts to cut costs include slashing employee salaries, trimming the hours they work, and reducing the business’s hours of operation. Nearly a quarter of businesses temporarily closed due to the pressures of this crisis.
Most small businesses are actively seeking ways to supplement their cash flow so they can survive. One of the most popular sources for relief is SBA disaster loans. Business owners are also seeking other forms of government relief benefits as well as more evergreen forms of financing.
Positive Signs Ahead
Given the grim circumstances, it would be understandable if small business owners wanted to throw in the towel. But that’s not the mindset of an entrepreneur. The US Chamber of Commerce found that 25% of small businesses plan to hire within the next year. And 57% have a positive outlook on the overall health of their business.
“Businesses with younger leadership are more bullish about the future,” explains the report. “Nearly 6 in 20 millennial- or Gen X-owned businesses (59%) expect next year’s revenues to increase, compared to 38% of businesses owned by baby boomers or older generations. Similarly, nearly 1 in 3 (31%) younger-owned businesses anticipate hiring staff in the next year, compared to just 10% of boomer-owned businesses.”
This positivity is helpful in the best of times and essential in the worst of times. Small business owners around the country are finding ways to pivot to new revenue streams and showcase their scrappiness.
Consider Mr. Holmes Bakehouse, a California-based bakery. When all their wholesale clients canceled their orders, the owner feared the business would be forced to close. After all, how do you recover from losing $3 million in contracts?
But Aaron Caddel, the 28-year-old owner, realized that homebound shoppers and limited ingredients in stores might provide a new opportunity. He now sells baking kits on his website that include flour, yeast, and instructions for making bakery-quality bread.
Before this crisis, Caddel had never thought about creating all-inclusive kits. But necessity is the mother of invention, and he’s joined the ranks of entrepreneurs adapting to the conditions and finding new ways to be successful.
While businesses such as Mr. Holmes Bakehouse have pivoted in order to succeed, others were already primed for success because what they offer is needed more than ever in a pandemic. If you manufacture surgical masks or respirators, the months and years prior to COVID-19 brought a wide range of business demands. Now, your products probably fly off shelves faster than you can replace them.
“With the US business landscape radically changed in the past few weeks due to coronavirus, the majority of stories people are hearing concern businesses closing or laying off workers,” notes the US Chamber of Commerce. “However, some small businesses are uniquely suited to the COVID-19 crisis and have seen an uptick in demand […] Businesses that help people ‘social distance’ themselves from others and retailers that help people stock up for eating and drinking at home are primary examples.”
The nature of this crisis is setting certain industries up for sustained success even after social distancing restrictions are lifted and life resumes in a semi-normal way. Here are 6 examples of businesses that will likely see sustained success in the coming years:
- Contactless payment providers: Despite the dire situation many small businesses face, 36% are actually seeing better sales. Of these rising businesses, 27% cite contactless payments as a key component of their success.
“There are many uncertainties about how the coronavirus will impact people’s health, their jobs, and the economy, but some consumer trends have already become so obvious that they suggest a long-lasting shift in people’s behavior when the COVID-19 crisis finally departs,” says a shopping analysis from CNET. “One of them is the move toward contactless transactions in the US getting supercharged, as shoppers try to restrict what they touch in stores—if they go out at all—to avoid catching the virus […] Now retailers that remain open are scrambling to respond to this new consumer need.”
Various forms of contactless payments are already in wide use worldwide, but the United States has been slow to get on the bandwagon. That appears to be changing, and businesses related to the technology and processing of contactless payments are set to thrive.
- Teleworking technology: When billions of people worldwide are working and schooling remotely, telecommunications become more important than ever. The industry was already growing in prominence prior to the pandemic. Now, businesses that provide support video meetings, chat, file sharing, and other mobile collaboration are seeing stratospheric growth.
Zoom and Slack are desperately seeking to hire for hundreds of open positions. And Microsoft’s Teams perhaps best epitomizes the huge growth in the industry, as detailed by MarketWatch:
“Microsoft Corp. announced a major makeover of its Teams digital-collaboration tool Thursday and said it has added as many users in a week as Slack Technologies Inc. has in total, underscoring the huge demand for work-at-home tech solutions amid the COVID-19 pandemic […] Use of Teams has flourished over the past year, reaching 44 million people on a daily basis as of March 18—up from 32 million on March 11 and 20 million in November—as well as 93 of the Fortune 100 companies.”
While some of these telecommunications services are offered free or subsidized, such as Loom making their premium service free to schools nationwide, there is still abundant money to be made. Zoom recently saw a 78% increase in net income, and comments from Cisco CEO Chuck Robbins suggest there’s plenty of growth to go around in the industry.
“In the first 11 business days of March, we’ve had 5.5 billion meeting minutes,” said Robbins. “Yesterday, we held 3.2 million meetings globally on Webex, and that doesn’t include one-on-ones. Those are multi-individual meetings […] The volumes are unprecedented.”
All this success isn’t exclusively tied to shelter-in-place protocols. It’s worth noting that some experts believe that remote work tech will become the default method for communicating from all locations. Presumably, workers would connect and collaborate with these tools even when they’re sitting together in the same office building.
- Technical support: When you think of the millions of workers around the nation who are utilizing teleworking technologies for the first time, it makes sense that tech support would be in high demand. The situation is compounded by the fact that many companies have scaled back their internal tech support due to financial woes.
There’s probably a wide range of tech-savviness among your small business employees. Some have the skills to build custom computers in their spare time, while others are still trying to master the sending and receiving of emails. Outside tech support is essential for all of these employees, assisting with various levels of needs.
Support.com, one of the most prominent players in the space, recently announced that they’re hiring “an unlimited number” of workers to provide remote technical support.
“In the midst of the current health crisis, hundreds of thousands of Americans are now facing unemployment in hard-hit industries that require high levels of human interaction such as retail, hospitality, travel, food-and-beverage, and many more,” says the company in a statement. “At the same time, enterprise companies and businesses of all sizes are looking to Support.com for professional, experienced customer support representatives that can be on-boarded quickly—driving the company’s current need to hire.”
Even after the pandemic passes, remote work will continue to be a major factor in the United States. Research shows that 99% of workers would like it to be an option that remains in place forever. This shift in priorities ensures that tech support will continue to be needed at higher-than-normal levels.
- Telehealth services and technology: As with telework and other services that allow individuals to continue their work while also social distancing, telehealth has experienced a massive spike during the pandemic. And it’s only added to the momentum the tech was already experiencing. In recent years, the use of telehealth was up 53%, which is stunning growth compared to much lower percentages seen at urgent care centers (14% growth), retail clinics (6%), and ambulatory surgical centers (6%).
As the pandemic continues to impact even the smallest details of our lives, this technology has become a preferred way for patients to safely and conveniently receive care.
“The adoption of telemedicine shifted into hyper-drive over the past month, with virtual healthcare interactions on pace to top 1 billion by year’s end, according to analysts at Forrester Research,” says a telehealth technology report from CNBC. “That would represent a massive expansion from telemedicine usage before the coronavirus pandemic.”
Many of the benefits of telehealth are evergreen, meaning they’ll still be applicable to healthcare providers and patients alike after things get back to normal. For starters, telehealth lowers the overhead expenses for providers. It also decreases no-shows and helps bring in new patients.
The enhanced flexibility offered by telehealth is particularly compelling to younger patients and providers. The ability to hold or participate in a consultation from any remote location is truly coveted. It’s also important that telehealth appointments can be conducted at any time that works for both parties, unshackling consultations from the standard office hours that have long defined the healthcare industry.
There are also key benefits to consider from an ethical perspective. Telehealth makes it easier for rural patients to receive healthcare. These individuals often find it difficult to travel the long distances required for healthcare appointments. Likewise, low-income patients in urban areas are better able to seek healthcare with telehealth because they don’t need to find transportation to the office, and the remote aspect allows them to schedule appointments around more difficult work schedules.
Finally, mental health patients and others with stigmatized conditions are more likely to seek healthcare when it can be done from the comfort and security of their homes. As long as the technology keeps the transmission safe from compromise, the benefits are too good to pass up.
- Delivery services: The US Chamber of Commerce reports that grocery stores are seeing high demand during the pandemic, with revenues up about 87% compared to last year. Panic buyers and curbside pickup help explain much of this growth, but that could easily be offset by the fact that many shoppers are completely avoiding stores to comply with social distancing guidelines.
Delivery services are the key factor here. More and more Americans are using third-party services to get what they need without leaving the safety of home. This shift means that businesses such as Instacart are seeing unprecedented demand.
Of particular note are services that offer the option of leaving deliveries right at the door, rather than requiring recipients to accept them in person. Instacart has been one of the first to offer service and has seen high consumer demand. During the first week of March, 25% of their orders took advantage of the feature.
“The following weekend, ‘Instacart experienced the highest customer demand in its history in the amount of groceries sold on our platform,’” reports the US Chamber of Commerce. “The average customer’s purchase is up more than 20% month-over-month and includes items like hand sanitizer, vitamins, powdered milk, diapers, face masks, and canned goods.”
In the post-COVID world, it’s anticipated that delivery services will continue to build upon their recent momentum. Because even when we’re not sheltering in place, most of us will be wary of the potential risks posed by crowded public places.
- Automation: Robots have long been viewed as a threat to the global workforce. But the effects of this pandemic may cause some to reconsider whether or not it’s a problem to have fewer human interactions. This Entrepreneur article from 2019 takes on new meaning through the lens of our current predicament:
“Automation is not always a bad thing. Labor pioneer Walter Reuther earnestly believed that automation would be the salvation of the working man, and in many respects, he was right. Automation tends to replace back-breaking work that previously injured, poisoned, or just plain wore out workers. Unfortunately, it is also replacing unskilled labor like cashiers. Have you been inside a major fast-food chain lately? You order at a touch-screen kiosk, pay at the same kiosk using cash, credit, or debit cards, even Apple Pay or Google Pay. The staff of the restaurant is a shadow of its former self. There aren’t even jobs flipping burgers—instead, the patties are pressed between 2 searing hot rollers.”
It’s inevitable that automation will continue to diversify and grow. A large number of jobs will definitely be lost in the process, which is the tragic collateral in such scenarios.
But, as with contactless payments technology, the trend could also benefit public health. In a recent article, CNN referred to cash registers as “the most dangerous place in the store.” By streamlining processes that have previously required consumers to come in contact with areas that have been touched by countless other workers and shoppers, we can hopefully minimize the risk and impact of future pandemics.
The post-COVID road will certainly be bumpy and unpredictable. Businesses will rise and fall. But industries such as those listed above are primed to benefit from the unique problems that must now be solved. Their fates will ultimately be decided by how well they can sustain the current demand after the pandemic passes.