The digital transformation of society is redefining what it means to be a small business. Affordable access to technology, introduction of vertically integrated SaaS solutions, and the proliferation of the gig economy options have both opened countless opportunities and introduced brutal competition for entrepreneurs.
Facing Market Realities
Let’s consider two now common scenarios:
- A retired couple with two homes splits their time between the two coasts and rents out the vacant residence through Airbnb to supplement their income. This seemingly benign situation is actually an extremely sophisticated and competitive business with a worldwide reach, a powerful marketing engine, an integrated scheduling and payment platform, and is competing directly with the largest hotel chains in the world. Wyndham Hotel Worldwide is the biggest hotel chain in the world by the number of hotels, having 8,000 hotels in 66 different countries and annual revenues exceeding $2B. Wynham spent over $400M in marketing to compete, in part, with a retired couple! Technology is creating tremendous opportunity but is also increasing competition exponentially.
- A local, long-established merchant sells hand crafted toys she sources from local craftspeople. She believed her competitive advantage was the sourcing of artisan toys which are not easily mass produced. However, because of the availability of vertically integrated eCommerce solutions, some of her merchants opened eCommerce stores through Etsy and Shopify and became direct competitors with a reach to worldwide markets. Since the artisans do not have any retail overhead and have access to a larger audience, they quickly eroded the local merchant’s market.
So why, in the mist of all this rapid transformation, do entrepreneurs create new business and continue to thrive?
Most companies considered small-to-medium-sized businesses (SMBs) are very small. Of the 32 million SMBs reported by the Census Bureau, only 5.9 million of those have any employees, and of that population, 3.7 million have 4 or less employees. Despite their relatively small size, very small businesses (less than 100 employees) are a major contributor to economic growth, employing over 33% of the workforce. Proprietors of these small business must wear many hats and view time as one of their most scare resources.
How to Succeed as an SMB Today
Every entrepreneur has a different motivation for starting a business, but according to a survey of over 2,000 small business owners conducted by Salesforce.Com, there are certain commonalities across the group. The research showed that the top three reasons entrepreneurs start a business are:
- Be your own boss
- Create a work schedule that is flexible
- Bring a passionate idea to market
Although the top reasons varied by age group, with Millennials choosing “Bring a passionate idea to market” most frequently as the top reason, making money was not a top motivational force across the board, coming in 4th overall. Entrepreneurs create business to follow passions and take control of their lives.
When asked about the top constraints they faced in running and growing their businesses, the respondents were unified with the top three reasons being:
- Hiring the right talent
- Access to capital
- Insufficient time
These businesses were very open to employing new technologies and solution to the extent they can directly address these top constraints. Entrepreneurs want solutions that allow them to free up time and capital, which will in turn allow them to focus their attention on their core passions.
The Continuum model is ideally aligned with the top constrains facing SMBs. By leveraging our technology, your clients will:
- Shed the burden of finding technical talent in a highly competitive market
- Significantly reduce the time required by them to focus on IT, thus freeing them up to pursue their passion
- Reduce expenses and increase the level of service by leveraging your expertise and our scale
By Meaghan Moraes
By Gretchen Hoffman