SMB TV: Think Smart for the Holiday Season
Recall the dark summer of 2020, when you would have thought Main Street’s small and medium-sized businesses (SMBs) would be extinct by the end of the year. It was understandably pessimistic, but it didn’t take into account the tenacity that small business owners have repeatedly shown.
As part of the SMB-TV series produced in conjunction with PayPal, PYMNTS’ Karen Webster was joined by Mark Madrid, head of the Entrepreneurship Office for the US Small Business Administration (SBA), D’Shawn Russell, owner of Southern Elegance Candle Co., and Ed Hallett, Senior Manager, SMB, PayPal, outlining the new chapters in the small business survival and prosperity manual.
Madrid highlighted the resilience of SMEs, from pandemic-induced revisions to inflationary tornadoes.
“It’s a once-in-a-lifetime event,” he said. “When you factor in the pandemic and now the price spike, what they are doing is pivoting. They become more agile. They talk about “Made in USA” to overcome supply chain vulnerability. And they are thinking of 2023. I have never seen this planning spirit more than today.
Resilience and agility were common themes, as Russell described the ordeal of navigating his small business through one crisis and then another. This took the form of researching customer feedback which led to new value-added products and additional sales.
As a PayPal merchant, Russell said she relied on that relationship to ensure customers could pay the way they wanted, maximizing conversions on a rapidly revamped website during the worst shutdowns when physical traffic from shops was virtually non-existent.
“When we decided to shut down and only do online sales, one of the things we tried to do was make sure our customers could pay any way we could,” Russell said.
“I had to learn to scale very, very quickly,” Russell added. “The past two years have been spent scaling the business and growing it until this year when everything slowed down and we entered a recession.”
Praising the ingenuity of SMEs, Hallett said, “They need it more than ever in these times. D’Shawn is a very good example. The companies that have successfully adapted to changing consumer behavior are the ones that eventually prevail, survive and thrive.
“The big change that D’Shawn mentioned was that more and more consumers, mostly through the strength of the lockdowns, were switching to digital shopping.”
And as they do, the choice of payouts is decisive, he said.
See also: Main Street Health Q3 2022: SMEs fight inflation
While Russell was already omnichannel – “I tell everyone, if I could set up a table and sell a candle, we were there – school bazaars, church functions, I didn’t care – we were selling candles there- low” – she says becoming an online -first business was tough.
“One of the things we did was reach out to our customers and say, ‘What exactly do you need during this unprecedented time? What fragrances would you like? What products would you like? “, She said. “As a result, we have introduced room sprays. We have introduced many new options asking our customers because … they are also in the midst of a pandemic”, adopting new ways to shop and pay.
Madrid noted that SBA Administrator Isabella Casillas Guzman’s edict was “to be more customer first, advance technology and advance fairness.” This ranges from the reassessment of SBA loans to services as business management demands pour into the SBA.
Noting that 90% of all SMEs fail, Russell added, “I encourage all new entrepreneurs to make sure they find a mentor, especially something like the Small Business Administration who can really tell them the truth about running a small business.”
Hallett said the pandemic-accelerated digital shift has made some of that easier for SMBs, saying, “You can use your iPad and a point-of-sale app, many of which are free, to do the math. This data is then fed to a system that should automatically sync with your accounting software” while boosting your business credit rating with payment providers.
He pointed to products like PayPal Working Capital that extend business funding by using transaction history as a key indicator, saying, “Payments should no longer just be a means of accepting payment. It should establish a deeper relationship with your supplier so that it can provide easy access to capital that you can repay through your sales.
See also: PayPal Honey sweetens the pot for buyers and merchants as the holidays approach
Holiday 2022 pre-game planning
Webster shifted the discussion to tactical considerations for the upcoming holiday sales season which began in mid-October this year with Amazon Prime Early Access and other sales events.
Madrid listed SBA resources, including 1,000 Small Business Development Centers (SBDCs), more than 150 women’s business centers, the SCORE program with more than 10,000 volunteer mentors, and its 250 SBA chapters of a coast to coast.
“We have to realize and internalize that small businesses don’t take vacations,” he said. “So the practical tools are centered around planning, which is what D’Shawn was talking about. They focus on planning not just one quarter, but two quarters, three quarters, four quarters.
A proponent of SBA programs that encourage peer-to-peer collaboration and community among SMBs, Russell said, “During this time, we have focused on price and value because we realize that today our customers are very price conscious. It also continues to streamline operations.
SMBs today “have a very specific group of people that you serve,” Russell continued. “It’s a lot easier now as a candle company that sells to people who love living in the South to talk directly to those people and ask them, ‘What do you need from us? How can we support you?’
“Every time you do that, it gives you insights and insights that you wouldn’t normally acquire.”
An example of this is his Value Added view, which also applies to PayPal, where Hallett said PayPal Honey has saved consumers over $100 million so far in 2022.
“When you’ve done everything necessary to get a customer to that point of purchase, you’ve done 95% of the work, and you’ve probably spent quite a bit of money and time to get them to that point, make sure you to give the customer the flexibility of payment options…to complete the transaction.
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