"Winning the 2020 AARP Make Your Move Entrepreneurship Contest and the opportunity to have a power session with Daymond John was a game changer for the launch of my company, Xtended Financial Resources. It was phenomenal and Daymond’s advice helped our business grow beyond our targeted goals."
“The opportunity to review my business plan, vision and strategy with Daymond John is a priceless benefit of the AARP Make Your Move Entrepreneurship contest. The discussion was confidence building as Daymond reaffirmed key aspects of my business plan.”
- Alan Goodman, A Goodman’s Desserts (2020 Winner)
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Businesses everywhere were challenged by the pandemic. By December 2020, the Federal Reserve estimated 200,000 businesses permanently closed. Business owners operating in industries of manufacturing, restaurants or travel were hit the hardest. The revenue loss from business closures has had a profound impact on families and local communities. Despite the pandemic challenges and uncertainty, businesses have begun the difficult but achievable process of building stronger, more durable enterprises.
The Opportunity: Identify a New Gap in the Market
AARP Brand Ambassador Daymond John believes that a pandemic or crisis is actually a good time to launch a business. The shifting market creates new consumer challenges and unlocks fresh opportunities to solve a problem. The evidence further proves that small businesses are resilient, creative and resourceful. 1According to the US Census, 4.4 million new businesses were launched in 2020, compared to 3.5 million in 2019. For millions, 2020 was the year of opportunity to launch a passion business, identify a new market and connect with customer pain points in a new way.
According to the US Census, 4.4 million new businesses were launched in 2020, compared to 3.5 million in 2019.
Did you start, pivot or close a business in 2020?
Forbes asserts that between June and September 2020, 1.46 million business were started.
2021 Outlook
The State of Entrepreneurship & Finance:
Many entered 2021 with the hopes of a stronger economy, recovered businesses and the anticipation of the return of social interactions. In the first six months of 2021, the economy grew approximately 6.6 percent. Economists predict that business owners who were in the hardest-hit industries - such as restaurant, hospitality, travel and manufacturing - could encounter a surge in new business and returning customers once the economy rebounds.
The Opportunity: Build a New Revenue Stream
While there was a gap in equal distribution of COVID relief funding, many didn't access or qualify for commercial and government funding. Furthermore, the majority of small-business owners 50-plus prefer to bootstrap and take financially affordable steps to build their businesses rather than approach a commercial lender. Despite the decision to opt out of commercial lending, older entrepreneurs have proven to build the most profitable enterprises when compared with younger generations. Nonetheless, the surge of nontraditional funding offers a new opportunity to secure grants to boost the financial health of your business. Whether you're bootstrapping or applying for grants, decades of building critical thinking and leadership skill sets will position you for success in managing the financial health of your business.
What's preventing you from connecting with a financial adviser, if you haven’t already?
State of Government and Commercial Lending
The State of Entrepreneurship & Finance:
Pre-pandemic, female-owned businesses only received 2.8 percent of funding, and Black female entrepreneurs received 1 percent of venture capital funds. However, with the rise of alternative funding - such as crowdfunding platforms, corporate and nonprofit funding, and grant making - financial institutions, entrepreneurs and industry experts agree that the funding landscape is changing rapidly. In 2019, venture capitalists provided $298 billion in funding to start-ups and established businesses. Entrepreneurs age 50-plus, however, are powering their businesses with their resources by taking financially affordable steps.
The Opportunity: Consider Nontraditional Funding Avenues
As entrepreneurs emerge from 2020 with invaluable skill sets of crisis management and contingency planning, founders are better equipped to pivot and respond to customer needs as new requirements to operate emerge. Operationally, the ability of businesses to respond to customers' pain points and uncertainties led to new product lines, supplier relationships and additional revenue streams. Adaptability, resilience and versatility were the core lessons of 2020 - not just for entrepreneurs but for consumers as well.
Best Practices
The State of Entrepreneurship & Finance:
According to AARP Ambassador Daymond John, taking affordable steps to grow your business over time is the best option for growing a profitable business. Research has shown that older entrepreneurs are less reliant on loans for their business but that they build the most profitable enterprises when compared with younger generations.
The Opportunity: The 4 Relationships for Success
Having a successful business is often attributed to having a solid foundation. Several factors contribute to a solid foundation, including attracting a multigenerational workforce, finding the right mentor and understanding the financial and operational health of your business. One best practice is to secure BAIL: a Banker, Accountant, Insurance and a Lawyer. These business relationships provide legal protection and insight to make smarter financial decisions as you scale and grow the business. Securing BAIL also eliminates the blind spots in your crisis management planning and unlocks niche expertise. Collaborate with your four key relationships to craft a plan that addresses the "worst-case and how-I'll-fix-it scenario." Your crisis management plan can range from operations to production.
As brick-and-mortar businesses closed temporarily or permanently, the businesses that fared better during 2020 operated as e-commerce stores. 2The U.S. Department of Commerce reported that e-commerce sales rose from $156.39 billion in Q4 2019 to $206.66 billion in Q4 2020 - that's a 32.1 percent increase. Economists anticipate the e-commerce trend to continue in 2021 and beyond. In addition to the safety aspects, providing customers more options for how they can do business with you will lead to greater satisfaction and profits. As customers continue to do more business online, small businesses will need to embrace e-commerce when possible.
The U.S. Department of Commerce reported that e-commerce sales rose from $156.39 billion in Q4 2019 to $206.66 billion in Q4 2020.
The Opportunity: Lower Overhead Costs With an E-Commerce Approach
In addition to how the pandemic limited in-person interactions, there are two major benefits contributing to the fast growth of ecommerce: lower operating costs and agile operations. Online marketplaces helped businesses, both large and small, pivot their products and services in a cost-effective way with minimal inventory and overhead costs. 3While your business may already have a digital presence, Insureon, an online marketplace for small business insurance, reports that only 29 percent of businesses conduct online sales transactions. In contrast, more than 70 percent of transactions are made online. Understanding customer wants and needs is even more important than before. With more businesses moving to the online space, the rise of e-commerce platforms allows you to customize your store and access analytics. Digital marketing and lean operations allow entrepreneurs to have their ear to the pavement while addressing customer needs faster and more directly.
Which steps can you take to transition to e-commerce?
Branding
The State of Entrepreneurship & Marketing:
The saying "everything old is new again" speaks to the feat of marketing, brand awareness and value proposition. Regardless of industry, crowded marketplaces signal the competitive and oftentimes redundant nature of products and services. Having a thoughtfully crafted brand identity lays a solid foundation for how and when you'll communicate externally. The first step in building a brand is to answer the three W's: the Who, What and Why of your product or service.
The Opportunity: Barter on the Big-Ticket Expenses Like Branding
In Daymond John's The Power of Broke, he says limited resources and funds are a blessing in disguise for a new business owner; creativity and resourcefulness are born out of being cash-strapped. For example, many entrepreneurs began bartering talent, time and available resources in exchange for big-ticket purchases such as branding services. Branding is a critical step in the Who, What and Why of your product or service. Branding is defined as the visible elements of a brand - such as color, design and logo - that distinguish the brand in consumers' minds. Brand identity guides communications with your customers and stakeholders, as well as your social media presence. A common mistake of early-stage entrepreneurs is to invest heavily in a logo, website and brand guidelines before making a sale, conducting market research or collecting prospect information. If you're an early-stage entrepreneur, begin investing in a brand bible after gaining traction in your product or service by using key indicators such as sales and mailing-list subscribers.
A Shift to Digital
The State of Entrepreneurship & Marketing:
In the matter of a 30-day period, personal and professional connections turned digital as businesses and schools shut down. The lockdown forced all entrepreneurs to increase their digital literacy and presence. Online collaboration platforms and social media afforded business to have even more virtual connections, becoming the primary drivers of the "new normal."
The Opportunity: Get Creative With Online Engagement
Entrepreneurs who leveraged virtual events and online communities discovered a global reach much farther than their own geographical limits. If you previously relied on in-person events pre-pandemic to reach customers, transitioning to social media and digital advertising is an alternative solution to extend brand awareness. Product-based businesses should use image-dominant social platforms to engage with prospects as well as use direct-message discount codes to drive sales. If you have a service-based business, consider platforms that allow you to pose questions and engage with prospects by using brief responses.
What are some marketing strategies you can use to increase customers time on site?
Best Practices
The State of Entrepreneurship & Marketing:
Not only did business owners have to pivot their product lines and services to meet the safety demands of COVID-19, but they also had to update their marketing strategies to reflect the times. Before new product lines emerged in the forms of face masks and sanitizers, websites began adding "COVID Measures" landing pages to navigation headers that detailed safety responses and eased customer concerns.
The Opportunity: Share Your Story and Safety Measures
The pandemic was a unique lesson in market research and product development. Your marketing strategy should continue to speak to safety measures through website pages, landing page copy, marketing materials and indoor signage. As communities reopen, entrepreneurs need to keep the pulse on consumer attitudes and needs.
The most successful businesses run with consistent processes and workflows, regardless of product or service. While operations differ for every business, the global pandemic upended supply chains across the world. Industries that were able to pivot their products and services found a new way to connect with customer needs and pain points, and uncovered new suppliers.
The Opportunity: Create Stronger Operational Efficiencies
COVID-conscious products and services allowed businesses to unlock new revenue streams and serve new customers. The diversification of revenue streams and supply chains create stronger, more durable operations that future-proof your business regardless of the storm. As we are living, learning and earning longer, it's the first time in history we have five generations in the workforce - from Gen Z to the silent generation. As an experienced business owner, you have a wealth of contacts and soft skills to successfully run a business. Your critical thinking and leadership skills allow you to thread the different health measures and operational components of your business together while promoting psychological safety. Your business has the opportunity to ensure customers can be safe while supporting your enterprise.
How can workflows become more efficient? Are there any unnecessary or duplicative steps?
Psychological Safety and How to Reopen
The State of Entrepreneurship & Operations:
Did your revenue suffer due to the pandemic? You're not alone. 4Several small-business owners reported a revenue drop between 50 and 90 percent as a result of the early stages of the pandemic. While it's generally a best practice to launch a business with one core product and diversify over time, the pandemic demanded new products and services with a short production time. As COVID-conscious products emerged on the market, a unique opportunity emerged for you.
Leveraging small-batch production, bundled deals and preorder strategies are opportunities to sustain agile, affordable operations and offer both physical and psychological safety to customers. It's easier now more than ever to connect with your customers and gain feedback.
The Opportunity: Communicate Safety Measures in All Consumer Touch Points
As mask mandates and physical distancing ease, you cannot discard the importance of psychological safety among your customers. It will take time for comfort levels to return to a pre-pandemic normal, given vaccine hesitancy among rural communities and communities of color. While you continue to ensure customer safety, visual communication - such as in-store signage, email communication and marketing - is an opportunity to help reinforce your safety measures.
Comforting Customers with Products & Services Post-COVID
The State of Entrepreneurship & Operations:
In the initial stages of lockdown, your business may have operated with a nebulous set of guidelines and safety measures. As the Centers for Disease Control and Prevention (CDC) issued new information, communication with customers shifted from lifestyle and promotional language to logistical updates and health protections. Addressing your customers' fears, regardless of industry, is a critical component of communication and customer loyalty.
The Opportunity: Test Small Before You Invest Big
Entrepreneurs with agile operations pre-pandemic were best positioned for survival. For example, when you created a prototype and tested on your site (or marketplace), you minimized risk and controlled expenses while quickly meeting customer's needs. If your product or service sold, you may have scaled by increasing production on that item. It's understood that comforting customers during uncertainty goes further than marketing language. Products and services must meet those needs while pivoting quickly to the next emerging need. Leveraging small-batch production, bundled deals and preorder strategies are opportunities to sustain agile, affordable operations and offer both physical and psychological safety to customers. It's easier now more than ever to connect with your customers and gain feedback. Your soft skills, such as leadership and empathy, are not only invaluable, but they position your business for success as well.
How can you lower overhead costs?
Diversifying Revenue Streams
The State of Entrepreneurship & Operations:
Did your revenue suffer due to the pandemic? You're not alone. Several small-business owners reported a revenue drop between 50 and 90 percent as a result of the early stages of the pandemic. While it's generally a best practice to launch a business with one core product and diversify over time, the pandemic demanded new products and services with a short production time. As COVID-conscious products emerged on the market, a unique opportunity emerged for you.
The Opportunity: Develop a COVID-Responsive Product or Service
COVID introduced the opportunity for you to diversify your product lines and service offerings. As new sanitation and protective garments were being developed, suppliers changed and operations became leaner and more efficient. More importantly, the shift in the type and quality of products stimulated the financial health of businesses by diversifying revenue streams and boosting cash flow. This is a great time - if you haven't already done so - to develop a post-pandemic product or service to diversify your revenue stream. Consider your customers or consult your customer profile to find the right new product or service.
Staffing, Scaling and Supply Chains
The State of Entrepreneurship & Operations:
You may have had to temporarily furlough staff or contractors, or permanently reduce your workforce during the heights of the pandemic. As supply chains were disrupted or completely halted for product-based businesses, you may have had to develop a new strategy to connect with your customers. The development of protective and sanitation products positioned many entrepreneurs to weather the storm and scale their business in a new way.
The Opportunity: Revisit Your Supply Chain Process
While some industries shut down, others flourished. The lockdown forced individuals to spend more time in their homes creating new opportunities to meet a need based on altered behaviors and lifestyles of customers. Consider expanding your supply chain relationship to develop COVID-responsive products and services. You may have to scale back on other products in response. Keeping your pulse on gaps in the market for your customers, especially in an unusual event like COVID-19, facilitates the ability to continue operations.
While it may not be the right time to scale, consider what you'll need operationally (equipment, staffing, training and skills) in the long term to grow without disruption. For established business owners with full-time staff, consider filing an unemployment claim with your state's Department of Labor, which allows your employees to apply for assistance in the event of layoffs or future job disruptions. You've made it this far in your idea or business - it's never too late to pivot.
Your community is one of the key elements to your success, yet in-person connection became strained and disjointed. Connections spark community and drive sales that grow your business. However, online connections do not always equate to digital literacy.
The Opportunity: Keep Building Your Online Content
It may take some time to build digital literacy in the form of website optimization and sale conversions, but consider it as another technical skill in your wealth of knowledge and experience. Online community in the form of virtual platforms and social media can offer an additional opportunity - an unlimited reach to customers around the world. A carefully crafted brand bible can guide your online content, tone and engagement.
Building an Online Presence
The State of Entrepreneurship & Community:
The greater reliance on your digital presence may seem daunting, but it's a necessary step in reaching customers and growing your business. Building your online presence is not solely about gaining customers and brand awareness but also about turning customers into brand ambassadors.
The Opportunity: Leverage Free SEO Strategies to Build Your Online Community
You've done the work to set up a great website. Now, the most important component of your digital presence is optimization. Search engine optimization (SEO) can be expensive with the use of advertising; however, there are free methods to boost your website traffic that are also an easy lift. For example, consider embedding your social media feed on your website. Each post added to the feed reduces bounce rate, increases visitor time on the site and builds social trust. Most importantly, embedding a social feed on your website automates content updates and saves time for the next task.
Which systems or tools will allow you to connect with your customers on a frequent basis?
Networking and Mentorship
The State of Entrepreneurship & Community:
In the uncertainty of last year, you might have sought out a mentor or strengthened your existing mentor relationship. Entrepreneurship can be lonely as a sole business owner, especially so last year. It's important to have a mentor or participate in a business community where you can network, share problems and explore solutions.
The Opportunity: Join a Mastermind Group
If you're not currently paired with a mentor, consider starting or joining a "mastermind group," also known as a business group. The opportunity in sole ownership or being part of a small team is the ability to barter and exchange services between like-minded entrepreneurs in different industries. A mentor or mastermind group can help you keep costs down, make better decisions and build a strong community.
A mentor or mastermind group can help you keep costs down, make better decisions and build a strong community.
When seeking a mentor, what are the outcomes you hope to achieve?
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