Small business is the driving force of the economy, contributing 64 percent of all new private-sector jobs. But almost every small business struggles with scarce resources, expertise and technology to efficiently operate and grow. New online platforms are now transforming the way small businesses operate in every industry.
Online platforms are replacing legacy systems that have previously been offline, one-to-one, expensive and lacking transparency. The platforms of the future are technology-enabled, one-to-many, efficiently accessed, and driven by transparent marketplace dynamics. They will transform the productivity and output of small businesses everywhere, with massive effects on the economy.
So what are these platforms and how do they work? Let's take 10 of the most critical needs for a small business in any industry.
1. Finding Customer Leads
The old way: Yellow Pages, local newspapers and classifieds.
The new way: Thumbtack.
Thumbtack is a lead-generation platform for every type of small business profession. Consumers post a detailed request, and small businesses pay to respond to the lead. It's performance marketing at its best: business owners only pay for the leads they respond to.
As a business consumer, I've used it to find portrait photographers across the U.S., office cleaners in San Francisco, and designers for PowerPoint presentations.
2. Selling Products Online
The old way: Craigslist, eBay.
The new way: Shopify.
Shopify gives any small business an e-commerce platform out of the box. It provides themed stores, online payment, and support for SEO and other online marketing channels. Business owners pay per month, and pay a fee for online payment processing.
3. Payment Processing
The old way: Checks, money order.
Square allows any business to accept physical credit card payments. Its first product was a simple card swiper that plugs into your phone. It has since expanded into point-of-sale solutions and even online cash transfers. Stripe enables any website to collect credit card payments, without the headache and compliance usually required to do so.
Our business uses Stripe to collect credit card payments from all over the world in dozens of currencies. It has saved literally hundreds of hours of development and compliance time.
4. Bookkeeping and Accounting
The old way: Local accountant.
The new way: Bench.
Bench is a bookkeeping platform where accounting professionals work like your personal bookkeeping team. Business owners can select from a range of packages, with services delivered through an intuitive online interface.
5. Hiring Temporary Staff
The old way: Local staffing firm.
The new way: Wonolo.
Wonolo stands for "work now locally," and is an on-demand staffing platform powered by a mobile app. Employers can find hourly and daily staff in minutes. Their platform takes care of all the paperwork, payment and compliance.
6. Finding Full-Time Staff
The old way: Job boards, recruitment agencies.
Hired is a new type of recruitment marketplace where job seekers put themselves up for bid. It's an interesting and fast-growing model that solves one of the biggest challenges for hard-to-fill roles: access to available talent. ZipRecruiter allows small businesses to post a job ad to hundreds of sites and easily manage all applications through a single interface.
Recruiting for small business is often a painful tradeoff between money and time, but there has never been a greater range of tools and services that provide better alternatives than the old way of hiring.
7. Payroll and Benefits
The old way: Paychex, ADP.
The new way: Gusto.
Gusto is an online platform for payroll processing, compliance, insurance and now benefits. They focus specifically on small businesses, and have automated time-consuming, manual processes with intuitive software. Gusto can automatically file state and payroll taxes on your behalf (one of the biggest pain points for every small business owner) at an affordable monthly subscription.
As a foreign CEO setting up in the U.S., Gusto saved me weeks' worth of work and risk by managing all the necessary state filings and compliance reporting in hiring and managing staff.
8. Legal Support
The old way: Local attorney.
The new way: UpCounsel.
UpCounsel is a marketplace of experienced independent attorneys. Small business owners can engage specialist attorneys who have often come out of big firms for any project, while avoiding the typical overhead of working with a traditional firm. UpCounsel has also built an online platform to manage your legal documents to ensure you're always in compliance.
We've used UpCounsel for a range of legal needs. The most useful element was the ability to work with different legal specialists based on our specific requirements, whether immigration, contracting or fundraising.
9. Business Advice
The old way: Local consultant, your neighbour or relative.
The new way: HourlyNerd.
HourlyNerd is another professional-marketplace platform, focused on business advisors and MBAs. They match small businesses with MBA graduates and other "nerds" to help solve specific business problems -- ranging from financial modelling, marketing strategies, transactions and due diligence. Similar to the other marketplaces on this list, they allow small businesses to engage business professionals in a flexible way, without paying the overhead of a big firm.
I recommend every small business consider working with a platform HourlyNerd to tackle any of your biggest, hairiest business problems. The value from an independent, expert perspective can bring an entirely new focus to something you may not have even realized was holding you back.
10. Small Business Finance
The old way: Local bank (if you're lucky).
The new way: Kabbage.
Kabbage is an online platform that provides small businesses with capital and credit lines. They promote a "six-minute loan" with more flexible lending criteria than traditional banks. Other well-funded players in this space include Bluevine, Lending Club and Prosper.
These online platforms, and many others, are enabling the next generation of small business to become more technology enabled, efficient and productive. They will create opportunities for business owners, employees and the economy at large.
Michael Overell is the co-founder and CEO of RecruitLoop, the marketplace for Elastic Recruiting with expert recruiters and sourcers on demand.