Time for Congress to recognize the new normal for small businesses

In addition to devastating human lives, the Covid-19 pandemic has bulldozed through America’s emerging small and medium-sized businesses. Number of companies operating in the US from February to April 2020 plummeted This was a decrease of 3.3 million people (22%), the largest decrease on record.hundreds of thousands of people I never have We have resumed.

Fortunately, most small businesses survived largely thanks to the swift implementation of government assistance such as the Paycheck Protection Program and the Federal Reserve’s Main Street Lending Program. technology. Small and medium-sized businesses forced by local regulations to limit foot traffic to stores or close physical stores altogether are turning to Facebook, eBay, Amazon, Shopify and others to open digital stores. are increasingly turning to online platforms. Market to your customers on social media sites like Instagram and Twitter. Engage with suppliers and pitch to potential investors on video conferencing platforms like Zoom or Microsoft Teams. It also includes financial tools like Intuit QuickBooks, PayPal, Venmo, and Square.

After the pandemic, there is no going back.Percentage of e-commerce sales to total business sales jumped off It rose from 10 percent in 2019 to more than 15 percent by summer 2020, and has remained at this level ever since. E-commerce has now become a key aspect of the operation and success of new and small businesses.

But there’s a big problem. Government policies regarding small and medium-sized enterprises have not been modernized to recognize the economic benefits of digitalization. For example, small businesses remain uncertain whether they will be able to receive financing from the Small and Medium Enterprise Agency. 7(a) program It can be used to enhance your digital capabilities. This uncertainty has slowed the adoption and integration of digital tools.

Fortunately, bipartisan legislation has been enacted introduced Sen. Todd Young (R-IN), Sen. Jacky Rosen (D-NV), Sen. Ted Budd (RN.C.), and Sen. Jeanne Shaheen (DN.H.) — Small Business Technology Advancement Act — Clarifies that small businesses can use SBA-backed loans to pay for digital tools, software, and apps. Congress should pass the bill immediately.

of Digitalization trends Small business transformation has been in the works for years, but the pandemic has dramatically accelerated that change. This is mainly due to the warm support from American consumers.according to recent analysisthe pandemic has shortened customer adoption of e-commerce to just a few months, which would normally have taken 10 years. 3 out of 4 people Americans are trying new ways to shop because of the coronavirus.

Of particular importance is the accelerated shift to online shopping by older consumers.a investigation The number of baby boomers who reported ordering restaurant delivery through a website or app has increased by 47 percent, and the number ordering groceries online has increased by 47 percent, according to a study published in November 2020 by digital consulting firm MobiKitty. The number of people ordering groceries online increased by 469%. Number of people using telemedicine.

And that trend is likely to continue. Federal Reserve Chairman Jerome Powell speaking at the European Central Bank Forum in November 2020 Said“We’re not going back to the same economy. We’re recovering, but we’re transforming into a different economy that’s more technology-enabled… I think we’ll see a lot more remote work. We’ll probably see an acceleration of automation.” Everything is in progress, but there will be more to come.”

according to investigation According to Visa, more than 80% of consumers said the digital aspects of the small business experience, such as easy-to-use websites and online loyalty programs, are motivating factors when deciding where to shop. Additionally, 61 percent of respondents said they plan to increase their purchases online over the next five years, while 78 percent said they plan to maintain or reduce their in-store purchases. In the Mobquity survey, 9 out of 10 baby boomer respondents said they would continue to use remote e-commerce technology after the pandemic.

Given this reality, digital storefronts and sophisticated e-commerce capabilities are no longer a novelty that complements a company’s core identity, but a core business. Digital tools facilitate business operations, including the delivery of products and services. Process, pay, and track payroll expenses. Human resources; sales and billing functions; accounting. Track supplies, inventory, records, and expenses.Indeed, according to 2022 analysis According to the Chamber of Commerce, since 2020, small and medium-sized businesses that have incorporated technology platforms and tools into their operations have increased sales by 82 percent and profits by 84 percent, and 74 percent of them have increased employment.

The pandemic has dramatically accelerated the transition to technology-enabled e-commerce, forever changing the nature and operation of the U.S. economy and the competitive conditions necessary for business success. Today, America’s prosperity relies heavily on emerging small businesses operating, selling, growing, and thriving online.

It’s time for Congress to recognize and support this new reality by passing the Small Business Technology Advancement Act.

John R. Deery american entrepreneurship center.