For a long time the prevailing narrative on Main Street America was one of seemingly inevitable decay, in which local mom-and-pop shops were destined for obliteration at the hands of monolithic big-box retailers and impersonal e-commerce players. ‘Why shop local when you can shop cheap?’ seemed, for many, simply too compelling a question to ignore – and Walmart and Amazon reaped the benefits.
So what was underlying this dramatic shift towards larger scale enterprises? The answer is that big-box retailers and chain restaurants were able to dominate our business landscape through technology. Technology for payments, inventory management, detailed data analytics, automated payroll, and a whole lot more. Simply put, they had access to tools that enabled them to provide a consistent customer experience across the country; that constantly optimized prices; and that allowed retailers to maintain a ruthless control on their operating costs.
The problem for your local Mom & Pop was, of course, that this technology cost a small fortune. I started and spent many years running retail stores before I founded ShopKeep, and I remember my first point of sale systems costing well over $10,000. And that was just for hardware. I had to pay for the software, and the security patches, and I could only access sales data in the basement of my store. The kicker? If anything went wrong, I had to pay for customer care, too! The prevailing business model of technology providers at the time was to secure as much money upfront as possible and then ‘cut and run’ by making you pay for customer care. Needless to say, this structure favored the larger companies, who could swallow these costs.
The Good News? Times Have Changed.
The advent of cloud-based technology has dramatically lowered upfront hardware and software costs and made data more available than ever before. What’s more, it now seems like a new start-up pops up every day with technology targeted at small business owners. Innovation has been ceaseless, competition has grown, and the price point has been driven downwards.
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Now, a new local entrepreneur can access a whole range of services and tools that would have previously cost tens of thousands of dollars on day one. Services like point of sale systems, scheduling and payroll, gift cards and loyalty services, accounting and bookkeeping, and billing and invoicing are now available for less than the price of a good meal. In fact, there’s now so much great technology out there that it can be a little overwhelming, which is why I’ve put together a guide to the best technologies for small business owners to help get you get up to speed.
The Results are Clear
According to the Census Bureau, there are currently 23 million small businesses across America, which account for 54% of U.S. annual sales and have contributed 65% of all net new jobs since 1995. In short, small businesses are making up an increasingly big part of our national economy and forming the lifeblood of our local communities.
Tech-savvy small business owners are now running their affairs in a lean, data-led way; embracing the web to reach, engage, and retain customers; using technology to run efficient operations and optimize profits; and placing innovation at the heart of how they run their businesses.
For those of us who love diversity and originality – and who recognize the value of local entrepreneurship to the economy – the fact that we can bring some of this efficiency and advanced analytics to the small business community is a huge opportunity. And for the aspiring local entrepreneur, there has never been a better time to get started.
The technology that big businesses have had at their disposal for thirty years is now in the hands of the guy running your local bodega, the mom-and-pop behind your neighborhood wine store, and the young entrepreneur starting a new food truck.
For anyone interested in opening a store or restaurant in their neighborhood, we’ve written a Small Business 101 guide to help you get started and grow your business.