According to the Census Bureau’s Annual Survey of Entrepreneurs, companies with fewer 500 workers accounted for 99.7 percent of 5.6 million employer companies in the U.S. in 2016. Known as the backbone of America’s economy, 2020 has seen these small businesses being heavily impacted by the effects of the global pandemic. Thanks to many different government initiatives in supporting small businesses, some have managed to stay afloat, yet some still struggle to make ends meet and keep their doors open. When public funding is not the ultimate solution to the issue, many small businesses have turned to private funding and the interests of angel investors. Below are the top reasons why small businesses may be the best investment opportunities for 2020.
Reasons Why Small Businesses Make Great Investments in 2020
Small Businesses Are Prime for Innovations
How can small businesses be more innovative than large corporations? First of all, there are fewer hoops to jump through. Unlike large organizations where there often is a long chain of command and different procedures to go through, at a small company, since there are fewer people involved, it’s much faster to get an idea approved and executed. Furthermore, small businesses have a stronger drive to innovate as they need to find their footing in their industry. Large corporations have already well established themselves in the market and most of the focus would be placed on maintaining the current customer base and looking for new markets. Meanwhile, smaller ventures prioritize innovations as a way to set themselves apart from their competitors and gain a competitive edge in the industry.
Consumers, Especially Millennials, Love Local Businesses
The motivation to shop small has always been strong, especially among the millennial generation. The 2020 Consumer Culture Report released by 5W Public Relations estimated that millennials would spend $1.4 trillion in 2020. This generation has gradually become the the most powerful consumers, and the best thing is, they love small businesses! Social responsibilities matter to them, and keeping Main Street America alive gives them a sense of fulfillment in supporting their local communities. Small businesses are also superior to large companies when it comes to customization and personal touches – which is appealing to millennials, the generation that values authenticity and product uniqueness.
Small Businesses Need Your Support
In April 2020, Main Street America released a report called The Impact of COVID-19 on Small Businesses: Findings from Main Street America’s Small Business Survey. . It suggested that nearly 7.5 million small businesses might be at risk of closing permanently over the upcoming months. Consequentially, approximately 35.7 million Americans would be at risk of losing their jobs due to the effects of COViD-19. Being the backbone of the American economy, small businesses have been hit the hardest and they need all the support that they can get.
If you are an investor who’s looking for the next venture to invest in, we highly encourage you to give small businesses a shot as they make the best investment opportunities in 2020, amidst all the uncertainties that our country has been facing.
First Liberty – Your Top Small Business Investment and Loan Relationship Brokers
At First Liberty Building & Loan, we believe in Main Street businesses and have been honored to support them in the past 25 years. Though 2020 has been challenging, our trust in small businesses has been steadfast as we’re committed to building long-lasting, profitable relationships for both entrepreneurs and investors. If you are seeking investment opportunities for 2020 in the way of a partnership with a small business or start-up company, or are a business seeking a creative loan solution, we have ideas that can help you find that perfect fit.
Published by First Liberty on September 10, 2020