By Kushagra Shrivastava, managing director, Verizon
Today, we released findings of the Yahoo Small Business 2021 Microbusiness Outlook Report, a new survey that explores the state of microbusinesses (businesses with five or fewer employees) in the U.S. and their outlook as we emerge from the COVID-19 pandemic. When we asked microbusiness owners about their perspectives on 2021, the response was positive—though half (50 percent) of microbusiness owners continue to struggle with the economic impacts of COVID, 95 percent are optimistic about the outlook for 2021 and over half (52 percent) are even planning to expand their business this year.
Importance of Technology
Around 60 percent of all businesses in the U.S. have fewer than 5 employees. The positive outlook of these microbusiness owners for 2021 proves the resiliency of these entrepreneurs that represent an important powerhouse in our economy. Technology is playing a central role in this positive outlook, with nearly three in four microbusiness owners (73 percent) saying tech will be critical to helping them adapt and scale their business as they continue on the road to recovery from the pandemic.
Indeed, technology was a key factor in helping microbusiness owners succeed amid the unprecedented challenges created by the pandemic, with 37 percent of microbusiness owners making changes to the way they do business online. Among those using software platforms for business support, more than one in three (36 percent) invested in software platforms to optimize their business during the pandemic and another 29 percent plan to do so before the end of the year.
Marketing and E-commerce Growth
A majority of microbusiness owners (70 percent) surveyed reported making updates to their business in order to weather the COVID-19 storm. Many microbusiness owners are continuing to adapt their businesses to meet new customer needs, with 70 percent also planning to revise their business operations to meet consumer priorities post-pandemic.
47 percent of microbusinesses surveyed say increasing marketing efforts will be important to promote their business throughout the rest of 2021. In addition to marketing, ecommerce will be critical, especially for microbusiness owners still struggling with the effects of the COVID-19 pandemic. 74 percent of microbusiness owners plan to prioritize ecommerce tech over the next one to two years. Among microbusiness owners still dealing with the aftereffects of the pandemic, most microbusiness owners (81 percent) plan to concentrate on ecommerce tech in the next one to two years. This is compared to 68 percent of their peers who claim they are no longer impacted by COVID-19.
The Vital Role of Our Communities in Supporting Microbusinesses During the Pandemic
With many microbusinesses continuing to experience negative impacts as a result of the pandemic, our survey reveals just 38 percent of microbusiness owners received government support during the pandemic, and of those who did receive or expect to in the future, 61 percent expect that support to fall short of fully addressing their financial needs. Of the 50 percent of microbusinesses still struggling with the economic impact of COVID-19, two thirds (66 percent) have considered closing, but our findings underscored the critical role that community support played for microbusinesses during the pandemic, with 85 percent of the surveyed business owners saying community support was crucial to keeping them afloat.
Technology and continued community support will play a key part in supporting these business owners as they navigate the evolving business and consumer landscape as we emerge from the pandemic and enter into the next normal. At Yahoo Small Business, we’re proud to partner with these businesses as they navigate the next step of their entrepreneurial journeys.
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 U.S. business owners with 5 or fewer employees in the United States.