What Small Businesses Really Need to Make a Comeback
There’s a myth in the small business world: if you give an entrepreneur enough access to capital, they will succeed. The truth is, access to technical expertise around areas like budgeting, marketing, customer development, and supply chain management can be just as important as financing. In fact, it may be key to the comeback for so many small businesses right now.
For those of us that work in the small business arena, lending capital or offering grant capital is the most obvious part of support – and it needs to continue -- but technical guidance, coaching and mentoring often leads to the most viable businesses. From larger banks to Community Development Financial Institutions (CDFIs) to hundreds of diverse chambers of commerce, small business resource centers and other nonprofits, there is a passionate small business ecosystem focused on meeting small business owners where they are at – and being an advisor that can lend technical expertise on their journey.
In the pandemic, millions of businesses suddenly found themselves with no customers. A cabinetmaker in New England had to make the difficult decision to switch to manufacturing acrylic protective barriers for retail and offices when his residential customers for cabinets came to a halt overnight. Nonprofit Interise helped him connect to his first new customer and learn valuable marketing lessons. “That first sale just made things overwhelmingly real — that we can do this, and now we're selling everywhere,” owner Stewart Junge said.
Local Initiatives Support Corporation recently shared a story about how they coached a farming business to establish its first storefront so it could sell direct to consumers when sales to restaurants dried up. To get to that milestone, their team provided business coaching in Spanish, the preferred language of the small business owner, worked through connectivity issues in a rural location and helped the owner pivot to a different revenue stream.
The value of providing entrepreneurs with technical assistance cannot be overstated, not just in a time of crisis but in building vibrant small business districts and self-employment opportunities that create millions of jobs in local communities.
That’s why I was proud to announce at the U.S. Hispanic Chamber of Commerce virtual conference, a new roughly $50 million grant cycle from Wells Fargo focused on providing technical expertise to small businesses across the country, especially for those hardest hit by the pandemic. The hope is that nonprofits rooted in serving diverse entrepreneurs will tap into these resources to dramatically scale up the number of small businesses they can help save with coaching, mentoring and technical knowledge.
We hope others in corporate America will follow suit. In the meantime, here are three ways to help the small business recovery with learning, guidance and coaching:
- Collaborate. Accelerate recovery by bringing more corporate resources into the nonprofit sector, which is already entrenched in reaching small businesses but needs to ramp up to meet demand. We need more companies to fund technical assistance for entrepreneurs and organizations like Community Development Financial Institutions (CDFIs), which pair technical training with loans. Wells Fargo’s Open for Business Fund is an approximately $400 million small business recovery effort in collaboration with nonprofits across the U.S. Forming collaboratives among nonprofits is another way to take each one’s strengths and reach more small business owners by sharing networks, resources, experts and curriculum.
- Volunteer. If you have a technical skill, such as accounting, marketing, sales, customer development, communications, analytics or other important areas to running a business, consider donating time directly to your favorite small business or to a nonprofit in your area who works with entrepreneurs. You might be surprised how meaningful 5-10 hours of your time is in putting a small business on a growth trajectory or helping them find a solution. You can easily sign up at Pacific Community Ventures to get involved in virtual coaching, and entrepreneurs can turn to this great resource.
- Give customer feedback. Small businesses need constructive criticism to grow and to fix problems they may not directly experience. If you have a frustrating customer experience or you see an opportunity for a business to expand to a new customer, reach out to the business owner or send an email suggestion. Entrepreneurs are inspired to innovate but they often need customers to share what they want to ensure they stay relevant.
While small businesses across the country are hard hit by COVID-19 restrictions, there is optimism. While only 19% of business owners feel optimistic about their present situation, 41% feel optimism about what the future may hold, marking a 32% quarter-over-quarter rise, according to the latest Wells Fargo/Gallup Small Business Index.
The heart of the entrepreneur is strong and resilient. Let’s all rise to meet their confidence.
If you are a nonprofit offering technical assistance to diverse small businesses, visit https://www.wellsfargo.com/about/corporate-responsibility/community-giving/ (upper right corner) for more information on the Open for Business Fund.