With 2020 in the books, small businesses are optimistic that 2021 will be a brighter year. While the COVID-19 pandemic has not yet gone down for businesses across the US, this optimism is fueled by the delivery of vaccines. Although the pandemic has been front and center since early last year, there are other trends on the horizon for entrepreneurs as well.
Business News Daily connected with experts in finance, marketing, technology and human resources to find out what small businesses should expect in 2021 and how to take advantage of these trends.
finance
The Paycheck Protection Program will excite many small businesses.
The economic impact of the COVID-19 pandemic has depleted the cash reserves of many businesses. Although many states reopened after initial shutdowns, some are reimposing restrictions, reigniting concerns about cash flow and the survival of small businesses. The recent $900 billion stimulus bill includes additional funding for the Paycheck Protection Program (PPP), which was established last year under the Coronavirus Aid, Relief and Economic Security (CARES) Act. “Small businesses should try to take advantage of the new stimulus bill, which also includes a new PPP [loan],” said Courtney Lawless, venture capitalist and co-host of Amazon Prime series Wolf Pac.
PPP loans can be forgiven later, depending on how you use the funds. Read this article to know more about the new round of funding for PPP loan programme.
Alternative sources of capital will meet the unfulfilled funding needs.
For many other business owners, loans may not be an option, especially if they have suffered significant financial losses during the COVID-19 pandemic. In those cases, alternative sources of funding, such as alternative lenders or investors, can be vital for many entrepreneurs to obtain much-needed funding.
"Alternative sources of capital will also play an important role in keeping businesses solvent," Lawless said. “Alternative sources would include … grants, fintech, venture capital, angel investors, peer-to-peer lending, and crowdfunding to name a few. These are important because many businesses that actually need capital do not meet the requirements. Due to the negative impact the traditional funding source [Covid-19 pandemic] has had on their balance sheet."
Key takeaways: Government loan programs will be vital to the immediate survival of small businesses, but alternative sources of funding will be critical to keeping businesses funded in the long term.
Marketing
Spending on social media will increase.
There are billions of users among the major social media platforms, so it's no surprise that social media has been a growing target for marketers. This rapid growth will not stop in 2021. Estimates from insurance firm Finaria show that social media advertising spend will increase by 15% in 2021, raising total spending on social media ads to $105 billion. This is almost double the total advertising spend on social media in 2017 of $54.4 billion.
“Year over year, we are seeing an increase in spending on social media – and this year it was a dramatic increase,” said Ari Zoldan, CEO of Quantum Media Group. “Everyone was forced to back away from traditional brick-and-mortar marketing. They were forced into digital, and many of them see it working really well.
“We will look ahead with digital marketing spend in 2021,” Zoldan said.
While social media advertising is increasingly important, it is increasingly competitive. Small businesses should focus on a multichannel organic approach to build audience and brand awareness. While advertising can fuel organic growth, small businesses should avoid engaging in the social media arms race with competitors when an organic approach such as content marketing may result in a better return on investment.
Paid placement advertising will increase in traditional media outlets.
From 2012 to 2019, spending on paid placement ads in the US increased from $4.75 billion to $11.44 billion, and that trend is only going to continue into 2021, Zolden said. Additionally, the line between sponsored content and non-sponsored content is likely to be blurred, as viewers clearly prioritize the authenticity of an ad, he said.
"I think we're going to see a lot of paid placements in traditional media, because it's really hard to get earned media," Zoldan said. “Paid placements are going to be very engaging and video-focused; it will be hard to tell the difference between paid and earned.” Zolden said this could be a risky strategy for many media outlets, potentially jeopardizing their credibility. However, he added, "there are a lot of companies running in line."
Multimedia spend will generate better ROI than traditional press releases. In part because of the difficulty of securing earned media, Zoldan said, press releases are becoming less effective. Instead of brands sending text-based releases to media outlets in the hope that they will be published, press releases are likely to be brought in-house and news-worthy to produce video announcements of company developments.
"Press releases are a thing of the past," Zolden said. "Issuing a press release today has no significance."
Where press releases are necessary, they will be most effective when interactive or video-based, Zoldan said.
Technique
Augmented reality and virtual reality come into their own.
Augmented reality (AR) and virtual reality (VR) have been in the field for some time now, but 2021 could be the year they break new ground in terms of business adoption. The best part is small businesses can lead the trend.
"Virtual and augmented reality allow us to experience the world in a different way. And especially during a pandemic, it's extremely powerful," said Joe Effelbaum, founder and CEO of B2B marketing company Ajax Union. “If you want to go to networking events, you can go to VR networking events happening now. You can create trade show exhibits.
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