SMBs face multiple challenges, studies find

Surveys by Goldman Sachs and StoreConnect, published April 25, 2022, suggest small and midsize businesses (SMBs) are facing economic challenges on multiple fronts. The Goldman Sachs survey, conducted by 10,000 Small Business Voices, found 91 percent of SMBs dealing with inflation, supply chain issues and workforce shortages, all of which are negatively impacting their businesses. Researchers also found 73 percent of business owners struggle to meet rising energy prices.

Khari Parker, member of the Goldman Sachs 10,000 Small Businesses Voices National Leadership Council and owner of Connie’s Chicken and Waffles in Baltimore, noted that economic recovery has been slow for small business owners. “Small business owners need policymakers to understand that while most businesses have fully reopened since the pandemic, the road to a full recovery will be long – with new challenges around every corner,” he said.

Parker cited lack of skilled labor as another critical issue, stating 67 percent of survey respondents have increased wages to retain employees, and 61 percent have increased wages to attract new employees. To offset these increased costs, 60 percent have passed them through in the form of raised prices, he added.

Congressional support

Goldman Sachs researchers recommended further action by Congress to level the playing field for small business owners and help them compete with larger companies. These sentiments are supported by 93 percent of respondents, who indicated they believe the federal government should tailor programs and services to the needs of small businesses.

Joe Wall, national director of Goldman Sachs 10,000 Small Businesses Voices, stated that SMBs are sending a clear signal that the economy is getting worse, not better. “It has been 22 years since Congress reauthorized the Small Business Administration,” he said. “With small businesses struggling to compete with larger companies and suffering setbacks as they recover from the pandemic, it is time to modernize the Small Business Administration through reauthorization to meet the challenges of today’s economy.”

Reimagining ecommerce

A survey by StoreConnect highlights the need for ecommerce merchants to improve their websites to support robust international ecommerce requirements. Mikel Lindsaar, CEO and founder of StoreConnect, said small to midsize business owners should spend more time growing their businesses and less time maintaining ecommerce websites.

The right mix of tools and what he called “ecommerce 3.0” could remedy this issue, he stated. “I wanted to build an e-commerce solution that respects the valuable time of our clients enabling their growth while giving ‘David’ the tools to compete with the likes of ‘Goliath,’” he said.

Looking back at internet protocol evolution, Lindsaar said ecommerce 1.0 popularized the idea of making purchases without having to visit a store. This created a titanic shift within the retail industry, causing some retail stores to shut down and move online.

Ecommerce 2.0 enabled anybody to get online to sell, he added, which created giants in the industry, such as Shopify and others, that made it simple for anyone to create an ecommerce store almost instantly. During this stage, Lindsaar noted, we also consolidated customer data, buying habits, search histories, targeted advertising knowledge—all of which led to loss of individual privacy, which ecommerce 3.0 can rectify.

“The status quo has become an expensive nightmare for big brands,” Lindsaar said. “But for SMBs, it has been a growing and exorbitant time and expense factor that has been keeping them out of the market and unable to reach their full potential.”

A new ecommerce model

Lindsaar summarized ecommerce 3.0 as follows:

• Integrated: The ecommerce 3.0 system integrates all systems into one solution that links a merchant’s ecommerce website, corporate website, POS, marketing solutions, price, product, logistics, digital asset management and customer service solutions on a single platform that does not require constant monitoring and support.

• Customized: Ecommerce 3.0 is customized for each retailer and their own private environment of customer data. The solution provides each individual merchant with their own analytics and customer-knowledge system without relying on global enterprise companies.

Lindsaar affirmed that the disruption of the SMB market is ongoing, as businesses seek ways to eliminate bloat in staffing and resources and manage their assets. With 86 percent of digital commerce leaders citing digital commerce as a priority, demand from the SMB ecommerce market to find a solution has never been stronger, he added.

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