Written by Shawn Wellnitz, CEO & President of the Entrepreneur Fund and published by Business North.
At the Entrepreneur Fund, we have the pleasure of working with hundreds of our region’s entrepreneurs and small business owners. Throughout the last year we have seen our small business owners rise to challenges many of us could not have imagined. We cannot overstate the resilience we have seen from our local entrepreneurs and businesses as we all reimagine how we work. They are the innovators, doers, and earliest adapters.
While we can all understand the common trends like less office space and technology changes, there are a few major items we think will change business for the long-term.
12-month make-over: Small business edition
Pre-pandemic we saw a dividing line: people who embraced technology for their business and varying levels of adoption by others. The initial investment of time and money for technology is a hurdle that many businesses face and used to avoid. In the pandemic, essentially all businesses had to adapt by getting their shop set-up with online retail, hosting meetings via Zoom or creating the functionality for customers to order their food online. All within a matter of days.
While all businesses had to adapt, there are those who will thrive that made major business model shifts. Restauranteurs, especially in Duluth, acknowledge the disruption that could come with a $15/hr minimum wage and knew their existing models would not work. In the pandemic, many discovered new ways to run effectively and profitably with less staff. With overnight changes in consumer behavior, restauranteurs found multiple ways to do this: cook from home packages, high volume online ordering, and multiple delivery channels. Retail was much the same, as we know of businesses that plan to only retail online for the foreseeable future, and who now have the ability to reach more markets and re-examine their staffing investment and ability to handle major fluctuations in sales. It appears that supply chains, distribution and customer experience will likely change for good. The technology that has been embraced over the past year, combined with major consumer behavior changes, has connected businesses with their customers, increased efficiency and helped us all over the road bump that can be caused by resistance to change.
Start-ups are back
The level of new start-up activity at the Entrepreneur Fund has reached historic highs. Many start-ups during the pandemic have successfully launched business plans that focus on online retail with no plans for a storefront. We also see more collectives popping up that feature multiple retailers in one storefront, decreasing overhead for the business owner when it is shared among many. The Entrepreneur Fund is working closely with statewide efforts to increase scalable start-ups. Minnesota’s “Launch Minnesota” and Wisconsin’s “Venture Home” are a culmination of each state recognizing the need for innovation and start-ups.
Workforce mobility is front and center
Small businesses are reimagining how they bring talent onto their team and re-thinking their available labor pool. Pre-pandemic, the Entrepreneur Fund knew of dozens of rural, professional service small businesses that offered hybrid positions with the option to work remotely with some in-office time. This was ideal for a lot of younger professionals. In the pandemic, we have heard consistent reports from clients about the availability to expand their labor pool with more remote workers, and also losing staff due to the availability of other opportunities. Some of these firms, who create and offer quality family sustaining jobs, are re-examining where they can find their people. Rural economic development boards are exploring how to attract people who can work from anywhere. Townships are also working on expanding access to broadband. The big question: What is the future of remote working? Many are hedging on its permanency in some way, shape, or form.
Workspaces & our communities
The flexibility of where positions can work from has undeniably changed over the last year. The reshaping of business models will change the need for space. We now know that many businesses can operate remotely, and many are examining the importance of face-to-face time for culture and training with meeting new workforce expectations and opportunities. We saw co-working spaces, existing or newly planned starts, be put on hold or decide to scrap their original plans as the pandemic steered people away from working closely with others. We have seen some abandon the concept while others see this as the future of work.
We can’t see the future, and we won’t try to predict it, but we do know that our region’s entrepreneurs will be front and center in driving changes. We actively partner with our entrepreneurs, with financing and advising support, to ensure that the entrepreneur sustains their resilience and ability shape our future. Entrepreneurs are one of our communities’ greatest assets, and we all benefit from their tenacity and creativity that keep our neighborhoods vibrant.