As we learned previously, small businesses have struggled in the past to keep up with corporate giants and an evolving technological field. We also learned that despite the growth of digital money trends it is very unlikely that cash use is ever going to stop. In fact, plenty of people still prefer to use cash when they have it available.
This is great news for small business owners.
Cash flow is always great for small businesses that need to keep customers spending money with them instead of giants such as Amazon, and is just one of the reasons why many small businesses may have more a chance of standing up to the behemoths than they might think.
Technology is Your Secret Weapon
While technology has been the reason traditional ATMs are being used much less and e-commerce has begun to dominate the market, it is also the main resource you can take advantage of. New tools are being introduced all the time that aim to make it easier for startups and small businesses to scale and develop at a fraction of the cost and time it traditionally takes.
This holds true for both physical businesses as well as aspiring app developers. For example, according to Codementor, it normally costs upwards of $200k to start and build a normal iOS application. Due to new financing and assisted infrastructure options, this number can be cut in half.
Let’s take a look at a few of these options:
The last couple of years have seen an explosion in the use of cloud infrastructure as well as pre-made rails for setting up and developing new applications. 30% of all IT budgets this year are now dedicated to cloud services. The benefit of offloading servers, computing, and storage to a third-party provider is unrivalled and is helping startups get off the ground faster than ever. Platforms such as Microsoft’s Azure are giving businesses access to these cloud computing tools and more. They also offer access to AI, databases, and even basic app development tools to help develop products and get to market faster and cheaper than ever before. The tools Azure offers even allow app developers to launch MVP’s in weeks as compared to the years it normally takes.
In order to compete with the services that big corporations and e-commerce giants are offering, small businesses need to take advantage of cheaper and more modern tools in order to get to market faster and rapidly scale.
Revenue financing involves getting a loan upfront and paying it back based on the revenue your business generates each month. It is the main alternative to equity financing and in 2019 and has quickly become the new go-to funding method for startups. The rise of revenue financing is due in large part to the speed at which startups are able to get to market and launch their product in today’s day and age. It used to take years for new businesses to start delivering revenue. Now, it is happening much faster. This is resulting in financial firms feeling more comfortable with funding early-stage businesses and allowing for more financial freedom early on for forward-thinking small businesses. It also incentivizes the funder to help grow revenue, as this is the only way they will get paid.
The Bigger Picture
The unicorn-breeding VC’s aren’t churning out the numbers they used to anymore. Startups are getting smarter and adapting, and the market is shifting gears. It used to be common knowledge that you needed to conduct funding a certain way and go through the steps every other company had to endure in order to find success...
This just is not the case anymore. Companies such as Mailchimp have achieved over $400 million in revenue with nothing more than a couple of angel investor rounds. VC’s everywhere would never have predicted something like this.
At the end of the day, it all comes down to how innovative you can get on how to develop your product. With cutting-edge infrastructure, financing, and development tools being introduced all the time - it is up to you to either get with the times or get passed up by young and hungry small businesses who are getting to market quickly and cheaply.