Catherine Arik
After Rip Van Winkle awoke from his 20-year slumber, Main Street in his village had changed. The cozy old inn he frequented with his friends had become a hotel with a bustling tavern of politically charged patrons. Two years after the pandemic began, we are emerging to a business landscape forever altered. Following the shutdowns, panic mode, adaptation and resilience, small businesses have finally made it through to the other side. But with a new normal comes new opportunities and new considerations.
In Utah, 99 percent of companies are considered small businesses. They employ 45 percent of state’s workforce. As an employee of the 10th-largest provider of U.S. Small Business Administration Paycheck Protection Program loans in the U.S., I had the opportunity to work with many business owners through their most challenging times.
But small businesses have been an important piece of the economic recovery story. Two years after the arrival of COVID-19, nearly half of Utah’s small businesses (47 percent) say they are operating at normal levels, while another 29 percent say their recovery will take more than six months, according to the Census Bureau’s latest Small Business Pulse Survey. All of Utah’s 11 major industry sectors are growing. And 45 percent of small businesses plan to hire new employees within the next six months, driving additional growth.
There are several ways small businesses can position themselves in the post-pandemic world:
Explore expanded SBA loan and procurement programs.
In early April 2022, the U.S. Small Business Administration announced revisions to its small business size standards in 16 industrial sectors. What this means is increased eligibility for SBA’s federal contracting and loan programs. The SBA estimates it will expand prospects for nearly 59,000 additional firms to receive millions of dollars in revenue and business expansion opportunities. Additionally, more newly qualified small businesses will have the chance to apply for SBA 7(a) loans — for working capital; refinancing debt; or purchasing furniture, fixtures and supplies — and 504 loans for land, buildings or long-term equipment.
The increases in size standards in 16 sectors will enable some mid-sized businesses to regain their small-business status and current small businesses to retain their small-business status for a longer period, opening up the doors to SBA’s procurement and loan programs. In the coming months, the SBA has said it plans to issue additional rules on size standards for wholesale trade, retail trade and manufacturing. Business owners can learn more at www.sba.gov/size.
Stay vigilant about fraud.
The increase in fraud activity during the pandemic isn’t letting up now that vaccines and boosters are here. It is critical that every small business examine and re-examine what their internal fraud protection culture looks like. Communicating and practicing strong internal procedures when collecting and transferring highly sensitive information is one of the best strategies you can make against potential fraud. In today’s world, even your own business email system can be used against you. If you haven’t already, implement a dual-authentication process, which requires more than one person to complete a transfer of funds. You can even set up a process in which your bank will call you and verify the submitted transfers. Ask your business banker about high-tech treasury management tools you can implement.
Evaluate your strategy to hire and retain workers.
Data from the MetLife and the U.S. Chamber of Commerce Small Business Index from the first quarter of 2022 reveal 56 percent of small businesses say they are concerned about recruiting enough new employees to fill open positions, and 57 percent are worried about employee retention. Many companies are experiencing a worker shortage and it’s important to make sure your wages, culture and benefits are competitive. Consider offering a 401(k) plan to cultivate loyalty. Other ways to support employees include increased flexibility and professional development and training opportunities.
Reinforce your marketing presence.
As consumers resume normal spending patterns, it’s important for your business to be top-of-mind with a clear value proposition. Consider building awareness through social media marketing in a variety of channels. Even a social media post boosted with a small amount of budget can dramatically expand your reach. Utilize targeted opportunities if you have a robust client email list. When clients you haven’t seen for a while return, remember to ask them for business referrals.
Research diverse business opportunities.
If your business is minority-owned or run by a woman, veteran or someone who identifies as LGBTQIA, you may be able to uncover programs that benefit your firm. More and more large corporations are offering supplier diversity programs. For example, Zions Bank invites potential vendors to self-identify through its Supplier Diversity program so that they can be considered by supply chain managers.
Other opportunities include special-purpose credit programs offered by some financial institutions, which may include revised underwriting standards that take into account historical challenges that minority-, women- and veteran-owned businesses have had in accessing capital. There are a growing number of financial institutions working harder to support traditionally underserved groups of entrepreneurs.
Consider sustainable options.
The Russian war with Ukraine is adding more uncertainty to the economy, just as it is turning the corner on the COVID pandemic. The war has pushed already high oil prices to new multi-year highs. As small businesses position themselves for long-term growth and success, many are transitioning to more environmentally sustainable strategies, including reducing energy consumption and clean energy solutions. As vehicles, equipment or buildings age, more and more small- business owners are considering greener solutions.
Rework buyer personas to account for post- COVID-19 behavior.
Because consumer needs shifted during the pandemic, it’s important to adapt to these changes. Your previous bread-and-butter client may have changed. You’ll also want to adjust your approach to reaching new customers, including younger generations whose buying habits may be less traditional. Don’t forget to appeal to your clients’ desires to shop local. Remind them that they’re keeping money close to home. For every $100 spent at a local small business, roughly $67 stays in your community. Play up the fact that small businesses give our neighborhoods their distinctive flavor and create a feeling of community.
Catherine Arik is senior vice president and Small Business Manager at Zions Bank. She has more than 23 years of experience working with business owners on tailored solutions to achieve their goals.