Small Business Success Through Tech Integration
Small businesses are a driving force in our economy. In fact, around 60% of all businesses in the U.S. have five or fewer employees. At Yahoo Small Business, we recently released findings from the 2021 microbusiness outlook report, a new survey revealing the state of microbusinesses (businesses with five or fewer employees) in the U.S. coming out of the COVID-19 pandemic, and their outlook on the future.
In the survey, 95% of respondents reported feeling optimistic about 2021. Our survey explored how different types of microbusiness owners weathered the storm, and revealed one common denominator across microbusinesses: technology was—and remains—a key dependency for success and growth. 73% of our survey respondents say tech will be critical to helping them adapt and scale their business as they continue on the road to recovery from the pandemic.
Technology integration in a COVID-19 world
Technology was a key factor in helping microbusiness owners succeed amid the unprecedented challenges created by the pandemic. Tech adoption spanned developing websites, adopting e-commerce platforms, and implementing software to help streamline and optimize business and customer management. Our survey found that 37% of microbusiness owners made changes to the way they do business online. Among those using software platforms for business support, more than one in three (36%) invested in software platforms to optimize their business during the pandemic.
We have the privilege of working closely with Michelle Ellis, owner of Cottage & Bungalow. Michelle is planning to begin using a customer relationship management (CRM) platform in the next one to two months, to streamline customer service functions, allow for more agents to follow up on customer inquiries and to consolidate requests. Like Michelle, another 29% plan to invest in software platforms to improve their business operations before the end of the year.
Driving success amid the pandemic
Among the different entrepreneurs we surveyed, microbusiness owners who identified as black, indigenous, and other people of color (BIPOC) had the biggest plans for business growth and expansion, largely driven by technology. Specifically, 62% are planning to expand their businesses this year, significantly more than their non-BIPOC peers (50%). What’s more, 86% of BIPOC microbusiness owners revealed that technology will be critical for growing and scaling their business, compared to 70% of their non-BIPOC peers. 78% of BIPOC microbusiness owners also report planning to update their business operations to meet changing customer needs post COVID-19 (compared to 68% of non-BIPOC peers).
Separately, the overwhelming majority (70%) of all microbusiness owners we surveyed, from BIPOC business owners to sole proprietors and entrepreneurs aged 40+,reported making changes to their business in order to survive the pandemic. For many, those changes happened online, from building out an online presence to adopting an e-commerce platform. That shift toward e-commerce is expected to last—from our survey, we learned that 74% of microbusiness owners plan to prioritize e-commerce tech over the next one to two years. Technology helped fuel the necessary updates to business practices and operations during the pandemic, and will continue growing in importance moving forward.
Advantages of technology adoption—and pitfalls of not investing
The future of business will be driven by technology. This makes tech adoption crucial for both younger and older microbusiness owners. Our survey found that 76% of microbusiness owners under 40 have invested or plan to invest in new platforms to optimize their business compared to just 54% of their peers over 40 who say the same. However, just43% of older entrepreneurs (compared to 52% of younger microbusiness owners) are behind when it comes to increasing their presence on social media or using tech to drive new products or service updates (17%, compared to 31% of their younger peers).
This gap may make it more difficult for older entrepreneurs to keep up as they emerge from the pandemic, with more microbusiness owners under 40 (65%) planning to expand than those 40 and older (39%). For microbusinesses across industries, technology integration to drive new products or service updates, optimize business practices, and sell online can be hugely beneficial to driving business growth. Working with a partner tech company can be a strategic move for those looking to integrate technology.
Future-proofing businesses through tech implementation
The positive outlook of microbusiness owners on 2021 proves the resiliency of these entrepreneurs that represent a driving force in our economy. New approaches to technology will be critical to growth and success for small businesses in the future. At Yahoo Small Business, we are dedicated to helping microbusiness owners succeed, by offering the tools and services they need to get online, and even launch a business. It’s up to trusted partner companies to walk alongside business owners as they integrate tech and future-proof their businesses through technology adoption.
The findings of the Yahoo Small Business 2021 Microbusiness Outlook Report are based on a survey fielded in May 2021, which yielded responses from 1,000 business owners with 5 or fewer employees in the United States.