In a post COVID economy, start up and small business work may be the new normal. The largest employer in many countries is small businesses. Small business is hard. Hours are long. Profit margins are slim. And, governments most of the time don’t look out for small business interests
Small businesses throughout the world generate new or net jobs. The challenge is that most small businesses are disrupted in ways that no one expected.
Small businesses in 2020 and 2021 will focus on making a profit. Why? COVID accelerated retail apocalypse. COVID crushed service businesses because of social distancing.
In most countries, it’s getting tougher to make a profit. A small business, considered less than 500 people, is squeezed by rising wages, trade war tariffs, and increasing cost of goods. They often can’t pass additional costs to the customer.
There’s also the Amazon effect. VUCANs are buying online. Each country and each sector has an Amazon equivalent. These online shopping centers remove the middle distribution company and retailers. The online shops can sell products cheaper and often pay for shipping.
Then in many western countries, there are increasing minimum wage requirements. In the U.S., there’s a push for $15 dollar an hour minimum wage or what’s called a living wage. This of course is different in many countries. However, the trend is similar. These small business and startup challenges will impact many workers.
Work Lesson Earned: Small business is often a family or retail business. They want to do the right things. The reality is most small businesses fail. They suffer from lots of regulation. Their margins are razor thin. Many owners and startup founders make less than the minimum wage.