3 Things Large Companies Can Do to Help Small Businesses
By Tommy Stinson, Managing Director, Qualitative Insights | March 23, 2020
In the United States, there are over 30 million small businesses employing almost 59 million people. The Small Business Administration has called them “economic engines,” central to growing economic output and employment. But beyond their economic clout, small businesses hold a special place in the American psyche. From George Bailey’s “Bailey Brothers Building and Loan” to the Gilmore Girls’ Dragonfly Inn and The Simpson’s “Moe”, small businesses play to our love of authenticity, honest hard work, and following our dreams.
Yet small business owners (SBOs) have already been hit hard by the growing economic and emotional impact of COVID-19. Limited cash flow reserves are common, and the growing number of locations enforcing “shelter in place” restrictions means that foot traffic is shut off and discretionary spending decreased.
We reached out to several SBOs in the US to listen, to ask questions, and to find opportunities for large companies and enterprises to step in and provide much-needed support. We conducted a targeted qualitative study with SBOs in the US during the pivotal week of March 16. Participants were interviewed via phone and, during the discussion, shared a number of images they’d chosen that expressed how they felt about the current situation and the future.
The Current (for now) State
Shock
SBOs we interviewed are still in a state of shock over the rapid and growing restrictions put in place to staunch the spread of COVID-19. As one SBO told me, “The bottom dropped out so fast, [I’ve] been digesting and getting over the initial panic” of the past week. The uncertainty of what’s coming next contributes to a paralyzing uncertainty about how to respond. One participant offered a picture of a psychedelic-style nightmare landscape, explaining, “I haven’t had a good night sleep since all this happened.”
Growing lack of control
As SBOs begin to recognize the need to respond and make decisions, many feel powerless to stop what’s happening. They chose images of hands tied, of a frightened child covering his face, of Sisyphus pushing the stone up the mountain. The emotional context here is striking: powerlessness, fear, lack of hope, and a sense of being trapped.
When prompted, most SBOs attribute this to a lack of visibility into what’s coming, a recognition of limited options for new revenue streams, and (for some) a fear that they can’t respond quickly enough to weather the storm.
Emerging entrepreneurial energy
Even amidst such fear and uncertainty, there is an emerging energy to react. For some, this is manifest in plans to take advantage of this time to evaluate and update core business functions like marketing plans and refresh websites. An owner of a small gym plans to learn how to live-stream group workouts to maintain engagement and a sense of community. Others plan to evaluate ways to minimize risk of ever being in this situation again: “I don’t want to EVER be in this place again! How can I create a model where I don’t ever find myself in this position again?”
Wherever they are, all SBOs we met are looking for support. They’re turning to their local friends and network, they’re reading what they can, and (sometimes frantically) trying to determine the best path forward.
3 Immediate Actions that Large Companies and Enterprises Can Take
We set out to identify ways that larger businesses and enterprises can step into the breach and provide immediate, tangible support for small businesses. Beyond large monetary donations to relief funds, we identified three important smaller-scale – but crucial – opportunities.
1. Share what you know about the situation.
SBOs often feel that, because they’re small, they don’t have access to the same forecasts and information that large companies do. They’re looking to large companies with broader reach to help them stay informed. Consider: How can you share information and situational analyses with small businesses to help them plan and minimize the fear of missing out on important information?
2. Provide strategic guidance and advice to strengthen their foundations.
Those looking to adapt quickly and improve their business often don’t know where to turn. They value outside advice, mentoring, and guidance on ways to limit risks and strengthen their operations. Consider: What specialized knowledge or advisory services can you offer? Are you willing to do it at low-cost or no-cost to support them?
3. Foster local or regional industry networks for support and best practices.
SBOs thrive on their network and have been remarkably open with their competitors about how they’re responding to the fast-changing market. But outside of industry associations, their network is typically of their own making. It’s limited and may be already exhausted of new ideas. Consider: How can you use customer databases, technology, or LinkedIn groups, or your own brand clout to create opt-in networks for SBOs to gain new perspectives, learn from you and others, and share support?
“I, like most business owners, am a control freak. Having so many things up in the air is difficult, teaching me about how I need to pivot with the times. I hope that that sense of control will come back to me. If it doesn’t, it’s about learning to live in the new normal.”
Most SBOs we met feel that things will never fully return to normal. Though they’re hopeful for the future and are actively working to control their success, there’s a sense that we are in uncharted territory. Given the economic clout that small businesses carry, there’s a strong financial argument for helping them. But we know that emotions drive action more than rational considerations.
Given the cultural and emotional resonance of entrepreneurial courage and the individual striking out on her / his own, we believe that growing public support and grass-roots energy will ultimately compel companies to embrace the human connection and get involved and help.