We may well be witnessing an extreme case of the survival of the fittest right now in the local, small business space. And maybe it’s not exactly what Charles Darwin had in mind when he was writing about natural selection, but there’s certainly something going on.
Here’s a quick summary of Darwin’s thinking back it the mid-1800s.
Darwinism is a theory of biological evolution developed by the English naturalist Charles Darwin and others, stating that all species of organisms arise and develop through the natural selection of small, inherited variations that increase the individual’s ability to compete, survive, and reproduce.
Small Business Evolution
A small-business version of natural selection appears to be playing out now, in real-time, before our very eyes.
According to Yelp, the share of permanent business closures is rising. In mid-April, Yelp’s data suggested that of the businesses that had closed, just 21% were permanent. Today that number is much more like 55%.
Of course, this is a challenging time for the owners, operators, employees, and customers of those businesses that are permanently closing. Losing a business that might have been the family livelihood for years is heartbreaking. It is also a sad consequence of the pandemic for loyal customers.
Reaping the Rewards of Survival
Eventually, as time moves forward and scientists and researches find a way to stop COVID-19, local commerce will rebound and thrive. And when it does there will likely be fewer businesses to serve a demand curve that could well outpace supply.
This means that the businesses that survive the pandemic of 2020 (and maybe into 2021) can reap significant rewards for being ready to handle potentially much greater demand. But these survivors will fail if they don’t invest the time and money today to prepare for this eventuality.
And this means adapting to a new set of rules and practices. And it means taking advantage of software solutions that can save businesses countless non-customer facing hours every week. This adds up to hundreds of hours every year that can be diverted to serving customers and growing revenue.
At the same time, the surviving businesses must also figure out which software solutions they can deploy to drive more effectiveness and efficiency in their business. Also, a brand new crop of new businesses will be launching. The new businesses that will launch in the coming weeks, months, and years will be using a blank sheet of paper to construct their businesses. And they’ll have a head start in deploying software solutions from the get-go.
It’s never easy to watch businesses fail. But I would argue that the local small business space is sitting at the starting line. Engines are revving, business models are evolving, and business practices are shifting to grab the considerable opportunities that lay ahead.
To prosper during the next wave of growth, small businesses must meet the demands of the new modern consumer. Show up. Make changes. Meet the demands of the modern consumer. And then experience what may be an unprecedented rush of commerce.