According to the SBA Office of Advocacy, in 2021 there were 32.5 million small businesses in the U.S., which accounted for 99.9% of U.S. businesses. As these numbers show, small business is big now, and the future of small business is bright!
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The pandemic was hard on many people. As many businesses closed their doors, there were significant job losses and the economy started in a strong downward trend. But small businesses may be the answer to these recent challenges.
Small businesses have played a key role in keeping the economy afloat. According to NerdWallet, small businesses created 10.5 million net new jobs between 2000 and 2019, accounting for 65.1% of net new jobs created since 2000. There’s every reason to believe that small businesses will continue to create new jobs and employ more people in the future.
A new survey from the U.S. Chamber of Commerce Small Business Index revealed that 77% of small business owners are optimistic about the future of their business, and 62% reported that their business is in good health.
If there was one silver lining to the pandemic, it was that small businesses proved once and for all that they are resilient and agile enough to survive hard times.
“Small businesses are resilient. And I think many have learned that they can adapt and they can move faster than they ever thought they could. Change is here and businesses are resilient and they need to embrace the change and embrace the opportunity that’s coming.”
Small business owners who kept their businesses afloat during the global economic challenges caused by the pandemic proved their worth and quality. Entrepreneurs created new strategies to deal with an increasingly difficult economic situation, illustrating that small businesses are agile, adaptable, and flexible.
“You talk with small business owners who have been at the deepest and darkest hole — the pandemic — and there is this glimmer of light. That glimmer of light … has given small businesses incredible optimism.”
As a sign of that optimism, nearly half of small business owners plan to spend more money in 2022 than they did in 2021 to invest in their businesses.
Many cities across America realize how important it is to create a vibrant community and are implementing new incentives for small business growth, ensuring that their communities continue to thrive. For example, many cities have introduced Small Business Development Centers that specialize in supporting the needs of small businesses.
The Paycheck Protection Program also offered tax credits that paid employees of small businesses by electronic direct deposit or payroll card. The program’s goal was to both support small business owners and help ensure an easy way for workers to access their pay during the pandemic. According to NerdWallet, of the 5.6 million PPP loans approved in 2021, 5 million went to businesses with ten or fewer employees.
These incentives and others like them encourage growth and give back to small businesses. They help promote local community growth and entrepreneurship. The goal is to lift up communities by focusing on their greatest resources: their people.
The future of small businesses is looking up and is full of great opportunities for those willing to adapt quickly and work hard at their ventures.
“Small businesses contribute to local economies by bringing growth and innovation to the community. Small businesses also help stimulate economic growth by jobs for people who may not be employable by larger corporations. Also, small businesses have certain advantages over large businesses: flexibility, lean staffing, and the ability to develop close relationships with customers.”
Small businesses recognize that the community is their lifeblood. In a survey of small businesses, Salesforce found that 67% of small business leaders say that community support has been important to their company’s survival.
Customers are more inclined to shop at local businesses that are proactive and show they care, while employees are more willing to work in environments where they feel safe and valued.
The same Salesforce report found that 83% of small businesses have at least some of their operations online. Of those, 95% moved a portion of their operations online in the last year as a result of the pandemic and remote work priorities. It’s estimated that remote work will increase 13.5% even after the pandemic.
Interestingly, many small businesses are looking to make these changes more permanent. Three-quarters of small business leaders believe shifts they’ve made to business operations over the past year will continue to benefit them in the long term.
U.S. small businesses employ 61.2 million people, which equates to 46.8% of the U.S. population. That number continues to grow, with an increase in entrepreneurs over the last decade and bigger investments in small businesses over the past several years.
Small businesses aren’t just an important aspect of the economy, but also a significant part of the workforce. Statistics show that small businesses continue to play a significant role in the economy and can adapt and grow over time.
During the pandemic, many small businesses had to transition rapidly to an increased online presence. Digital operations like support, online ordering, and remote services were, and continue to be, in high demand from consumers worldwide.
Recent data revealed that 71% of small businesses say their customers expect online transactions, and nearly the same proportion have an e-commerce presence. That’s likely why more than half of growing small businesses accelerated investments in sales and customer service technology over the past year.
Advanced technology is one of the top trends for small business owners. It’s becoming more and more common for small businesses to rely on remote and mobile services like cloud computing, mobile applications, and videoconferencing to get work done.
Stephen Markwell, Product Executive at of JPMorgan Chase, recently noted the following about small businesses:
“The barriers to entry have probably never been lower than they are today. It is literally over a thousand times cheaper to start up a business today as compared to 15 years ago. And this is fueled by the front, middle and back office moving to the cloud. It’s fueled by application connectivity and open source and a number of other factors. And it’s a strong funding environment, which we think we’ll see at least through 2022, if not longer. This bodes really well for startups. And I think these small businesses will natively be more adaptable and resilient.”
Small business owners who choose instead to rely on outdated legacy systems in the face of new technology will struggle in this economy.
For example, let’s take a look at RingCentral’s small and medium business customers. Small and mid-sized businesses upgraded their communications tech stack to RingCentral and saw the following results:
- 52% increase in return on investment (ROI)
- 27% increase in revenue growth
- 47% increase in customer satisfaction
- 33% increase in employee productivity
- 20% decrease in hardware costs
No one can predict what will happen in the future. One thing is sure: the way we do business will continue to evolve and change, including the technology we use. Small businesses need to stay on top of these changes to be successful.
RingCentral’s cloud-based communications platform helps small businesses to stay productive and competitive in the digital world. RingCentral’s platform includes:
- Phone, messaging, videoconferencing, and more all in one app to support a work-from-anywhere business
- Call center capabilities and advanced analytics to increase sales and service productivity
- 250+ integrations in the RingCentral App Gallery and open APIs through the RingCentral developer portal to customize all your workflows
- Seven layers of security and global certifications (including SOC 2, SOC 3, HITRUST, FINRA, HIPAA, C5, ISO 27017, ISO 27018, and GDPR compliance) to ensure your business is always protected
- 24×7 support by phone, chat, and email so that you’re never alone
The future of small businesses will depend on the ability to embrace technology and stay competitive. There has never been a better time for your small business than right now. Take advantage of the tools available to you and keep moving forward into the digital age!
RingCentral is your partner in the cloud. With RingCentral, you can focus on what matters most to you: growing your business and delighting customers with superior products and service. See our small business solutions page to learn more about how RingCentral is helping small businesses grow.
Originally published Mar 24, 2022, updated Dec 30, 2022