A new duty for software: helping local businesses thrive ??

After 21 years of hard work, my parents recently sold their local sports business.

Finally, they can kick back and enjoy some well-earned quality time together. As I write this, they're en route to Rhodes for a 'little vacay', and I couldn't be happier for them.

You see, I was clueless about how hard my parents were working all these years. They both had to work a second job to make ends meet. My father worked the night shift in a factory from 10 pm to 6 am, and during the day he ran the shop from 1 pm to 6 pm. Meanwhile, my mother had her own nail salon on the side.

Although I could see the many hours they spent working and raising us, I didn't fully grasp the magnitude of their efforts. Now I do and I'm forever grateful.

Kudos to you, Mom and Dad!

But let's get to the point of this article. During these years, and having worked with 100+ small to medium-sized local businesses (in short = SMB), I’ve had an insider's view of how the landscape of local businesses started changing.

My parent's shop had plenty of happy customers, I could see them going in and out of the store every day.

However, in 21 years, they gathered a grand total of ???13 Google reviews ??.

They only had a simple informative website in the last few years of their business. They never sent a single promotional email, texted customers with new promotions, asked for reviews or referrals, or advertised their business on Facebook or Google (they never even pressed the tempting boost button).

Hats off to you, parents. They did an excellent job building a healthy and profitable business relying on face-to-face selling and building customer relationships, like in the good old days.

BUT…reminiscing about this today, I just can't help but wonder:

What heights could their business have taken if they had fully embraced technology?

Local businesses got left behind, and software is to blame!

Over the last two decades, software has been devouring the world.

However, something happened during this raid: local businesses got left behind. Way behind.

Of course, it makes perfect sense when you consider why. There is a lot of money to be made by selling software licenses to large companies with big budgets. These companies often have specialised teams that are eager to explore every single feature on the platform. The market for enterprise software is huge and projected to continue growing.

However, this modern-day gold rush has had the unintended consequence of further tilting the balance of power towards big businesses at the expense of small ones.

In fact, over the past two decades, the Fortune 500 have amassed record profits while local businesses have struggled to survive.

Obviously, there are many variables at play in both cases, but the impact of technology should not be underestimated.

Looking ahead, our future is digital, and the pace of change is increasing exponentially. This much is beyond debate.

Businesses that have access to technology can make the leap into so-called “digital transformation,” and are thriving. And even though software companies have been embracing local businesses in the last 5 years, there is still plenty of room for adaptation.

Competing in a world of on-demand everything

With the rise of big tech companies, consumers expect Amazon-like convenience from every business. Unfortunately, many local businesses are not equipped to provide these experiences, which big tech companies have trained modern-day consumers to expect.

Top that with the recent ‘black swan’ pandemic that has accelerated the digitisation of customers even more. Remember the online food orders, curbside pickups, QR-codes and conducting yoga classes over Zoom? According to a recent survey by McKinsey, COVID accelerated the digitisation of experiences by 3-4 years.

While digital transformation may feel daunting to a local business owner, it’s becoming more and more a necessity to stay afloat in today’s world and foster growth.

But by taking a closer look at Amazon’s success, businesses with a physical location can improve their game and encourage people what they secretly prefer anyway: shopping local.

Understanding what’s at stake

While all the eyes are more often than not on large tech companies and their founders (Tesla, Elon Musk tanning on a yacht, Amazon, Netflix, …). After all, their success matters more to Wall Street than to Main Street.

Why is it important for local businesses to succeed? Though they may be small in size, they have a big impact.

Here are a few numbers to prove my point:

US:

• 61.7 million workers - nearly half of all US employees — are employed by small businesses.
• Small businesses make up 44% of the economic activity in the country.
• 33,2 million businesses?— or 99.9% of all domestic companies — are considered small businesses. Even if we reject the SBA’s threshold of fewer than 500 employees as "small," there are still 27 million sole proprietorships and 20 million people working for companies with fewer than 20 employees.
• In the last 25 years, small businesses created a net 12.9 million new jobs, which accounts for roughly 66% of all jobs created in that span. In the same period, large businesses only added a net 6.7 million jobs,?the SBA reports

Europe

• 23.1 million small and medium-sized businesses (SMB's) represent 99% of all businesses in the EU.
• They employ around 100 million people and account for 58% (!) of Europe’s GDP

UK:

• 5.6 million SMBs contribute more than ￡2 trillion in turnover which is nearly half of the UK’s total turnover
• They employ 44% of the British workforce.

In short, local businesses truly are the fuel of our world's economic engine.

Every country’s №1 priority, now and in the future, should be to preserve a vibrant local business ecosystem.

Software as a vertigo

Where the expansion of software has created a Golden Age for big businesses, the rapid rise of technology has led local businesses to extreme disorientation.

To clarify, just think about a few ways technology has changed the way local businesses get found and chosen in recent years:

• Think about the last time you needed to make a purchase. Chances are, you consulted online reviews before making your decision. If you don't have the best and/or most reviews, they won't choose you. Have you ever been to page 2 of Google? If you’re not on page 1, you might as well not exist.
• Millennials are here and Gen Z is taking over. They tune out promotional emails, contact forms, 3-day replies, 3.9-star ratings, and printed ad banners. They expect businesses to communicate with them in their preferred way (spoiler: via texting), with fast replies and minimal friction throughout the entire customer journey. It's all about convenience now, and if you can't offer it, they'll find someone else who can.

These are just a few examples of the myriad ways in which business has rapidly and radically changed.

Meanwhile, local business owners are overwhelmed with the task of keeping up with their daily routines.

How can business owners be expected to master text marketing or SEO in addition to their already demanding commitments that already have them underwater?

We’re quickly moving into a future where only local businesses that make the digital leap — or start with a digital plan in place — will survive.

Software as the antidote

Ironically, the same technological forces that drive these disorienting changes for local businesses can also aid their evolution.

For example, asking clients for online reviews or referrals may seem intimidating to business owners at first, but they’re the most powerful channel for acquiring new customers if you run a local business.

Implementing a webchat widget to your website so clients can ask you a quick question instead of having to fill out a form (we hate forms) increases the chance of a website visitor becoming a client by 630%.

98% of text messages are opened, and 65.6% of consumers believe that texting makes engaging with a local business more convenient. Additionally, marketing automation is becoming increasingly user-friendly and mainstream, so even the busiest business owners can use it. This powerful combination provides yet another compelling reason to jump aboard.

In short, technology is not inherently a destructive force for local businesses. When used properly, it can actually be a powerful catalyst for business success.

While the previous decade or two has taken big businesses into the cloud, local businesses have patiently waited their turn and are now adopting SaaS in droves: 94% are now using cloud services to run their businesses, a massive increase over a mere 27% in 2011.

It’s cliché but a happy customer is the best marketing you can invest in. Therefore, taking care of your customers should be a priority, as they’ll take care of your revenue for you.

The New Duty of SaaS ??

In conclusion, the root of any change in business starts with your customers. As I've said before, and I'll say it again::

Customer happiness is how you win in business.

I founded The Local Club to bring the benefits of the?SaaS movement to mom-and-pop shops (as a tribute to my parents), but frankly, all local businesses of all shapes and sizes.

This brings me to The Local Club’s evolving mission — or, more accurately, our mission of aiding evolution. This mission is to help local businesses meet the future and thrive in a digital world.

That world looks very different now than it did five years ago, and nobody knows what the next five years will bring.

Regardless of what the future holds, we’re not going to let local businesses get left behind again. It’s their turn to shine, and we’re going to do our part to ensure technology works for them instead of against them.

Now, if you are a business owner and you would like to talk about this. I’d be more than happy to. Send me a DM and we’ll take it from there.

Thank you for reading!