Hilton Smith, a 60-year-old business owner, was a staple in his local community. His store of 100 years had passed 6 generations of owners. The business had seen good times and bad times. While his youngest son (a business degree) tried to help his dad adjust to the changing landscape, Hilton rejected these ideas, including having a website and developing a social media presence. Hilton barked at the idea of interacting with his customers virtually instead of in-person. Covid-19 hit the community. Lockdowns occupied. Hilton put a sign on his front door: “CLOSED INDEFINITELY!”
Bringing in a New Year creates a sense of renewal and opportunities. Yet, many small businesses have a ‘wait and see’ attitude riddled by uncertainty and unpredictability of the future. Most organizations have limited resources and must be cautious about their business growth. However, if small businesses were given a master list of areas to improve based on market forces, these companies would be in a better position for the upcoming year. This article examines the seven critical trends that small businesses should consider in the economy to better manage market disruption in their organization.
With the uncertainty of a new presidential administration in the United States and the lingering impacts of Covid, many organizations should rethink their business strategies. Small businesses are no exception. According to a business study conducted between March 28 and April 4, 2020, small businesses have been heavily damaged by the lockdowns due to Covid-19. In an analysis of more than 5,800 small businesses (reaching a network of 4.6 million small businesses), the research highlighted the damage caused by the pandemic. At this juncture, 43% of businesses had temporarily closed, and nearly all of these closures were due to COVID-19. Respondents stated that they had temporarily closed, largely pointed to reductions in demand and employee health concerns as the reasons for closure. In fact, the businesses, on average, reported having reduced their active employment by 39% since January. All industries have been impacted.
Why evaluate emerging trends as a small business? Many larger companies can withstand the destructive nature of disruption in the marketplace. However, small businesses are more vulnerable. While incremental change is often slow and predictable, disruptive change can be characterized as rapid and unpredictable. These traits of disruption bring uncertainty into the marketplace. Managers worry. With market disruption, experience can be seen as a liability. McKinsey expert defines market disruption as “a profound change in the business landscape that forces organizations to undergo significant transformation rather than steady incremental changes.” Historical examples can be found in transportation (i.e., horse carriage to the automobile) to communications (i.e., telegraph to the Internet). Furthermore, the fact that nearly 9 of every 10 Fortune 500 companies in 1955 are gone today demonstrates the significance of market disruption. Yet, savvy businesses can take advantage of disruption if they understand the principles. Dr. Clayton Christenson, the author of The Innovator’s Dilemma, argues the opportunity brought by disruption: “Disruptive technologies typically enable new markets to emerge.
Looking ahead to 2021, there are seven trends that small businesses should consider. Yet, nearly a year after this pandemic, the full impacts on the U.S. economy are not fully clear. Small businesses should review the following trends to capture new, unmet customer needs in the future:
Today’s small businesses and entrepreneurs must retool themselves, given the potential impacts of Covid-19 have the necessary capacity to change their way of thinking because of their passion. Disruption will be the word of 2021 as organizations consider the impacts of Covid-19 in 2020. This article discussed the seven critical trends that small businesses should consider in the economy to better manage market disruption in their organization. While larger organizations may survive the impacts of market disruptions, most small businesses cannot. By taking the necessary steps to understand these market trends and maximize capturing unmet needs in the market, small businesses can make a positive investment in their future. Let’s pray that it is not too late.
© 2021 by D. D. Green
About Dr. Daryl Green:
Dr. Daryl Green provides consulting, guidance, and management training for today’s small businesses. He is the Dickinson Chair at Oklahoma Baptist University. He and his students have assisted more than 100 small businesses in the region with marketing and management expertise. If you would like more information about this article or business assistance, please contact Dr. Green at firstname.lastname@example.org or visit www.drdarylgreen.com.
“The Impact of COVID-19 on Small Business Outcomes and Expectations” by Alexander W. Bartik, Marianne Bertrand, Zoe Cullen, Edward L. Glaeser, Michael Luca, and Christopher Stanton
“What is Market Disruption?” by Becky Kelderman