Research

We looked at how manufacturers are adapting for current times and preparing for what’s ahead.

When the COVID-19 pandemic hit small and midsize businesses, many of them had to find ways to stay afloat. The fifth edition of our “Small and Medium Business Trends Report” details the specifics of some of their survival tactics, and shares small and midsize business (SMB) owners’ outlook on the future. While all industries faced challenges and constraints over the past year, manufacturing businesses navigated some particularly tricky terrain.

Unlike industries like tech and professional services, manufacturing demands a certain level of in-person, on-premises activity. As such, manufacturing SMBs haven’t been able to leverage digitization to ride out the pandemic as much as businesses in other sectors have. This is reflected in long-term planning: 65% of small manufacturing businesses said they plan on employees working in person over the long haul. That compares to just 45% across all other industries, on average. That said, small manufacturing businesses are leaning into technology where it can help, as suggested by trend #2 below. 

We took a deeper look into the data from our fifth edition “Small and Medium Business Trends Report,” to learn more about how manufacturing businesses are adapting to the current downturn and preparing for what’s ahead. 

Trend #1: Manufacturing businesses faced revenue and customer acquisition challenges.

Manufacturing SMBs saw revenue go down more than their peers over the past six months. Forty-five percent of those surveyed said their net revenue declined during the last half-year, which is notably higher than the 31% average of all SMBs we talked to. While manufacturing businesses reported having faced challenges at roughly the same rate as SMBs in other sectors, digging into the data reveals two key points that may help explain the revenue decline. Asked to list their biggest challenges over the past year, manufacturing businesses most frequently cited acquiring new customers (48%) and increasing sales revenue (46%). While these businesses leaned into digitization as they could, the nature of the industry made it harder for them to leverage technology to drive growth in the same way small professional services and technology businesses did.
 

Sixty-five percent of manufacturing SMBs plan for work arrangements to be in person in the long term.

Trend #2: Manufacturing businesses are leaning into tech where they can.

Manufacturing SMBs may not be able to go entirely virtual, but they are leaning into technology where they can. These businesses reported adopting project management and task collaboration tools at a higher clip over the past six months than the previous average (28% versus 23%). They also accelerated their investments in information technology (IT) operations more (44%) than the survey average (39%) over the past year. Investments in marketing technology also trended a bit above average, with nearly one-third (32%) of manufacturers reporting slightly accelerated investments, as compared to the survey average of just 24%.

Slightly accelerated technology

Trend #3: Despite challenges, manufacturing SMBs are optimistic.

Virtually every small business had to make changes to stay afloat over the past year. Seven in 10 (69%) of manufacturing SMBs said they strongly or somewhat agree that shifts they made to business operations this past year will benefit them long-term. Among the changes manufacturing businesses implemented, contactless services including secure digital payment options (59%), ecommerce offerings (45%), and support for mobile orders (43%) top the list of those most likely to be offered permanently.
 

Sixty-nine percent of manufacturing SMBs say shifts they’ve made to business operations will benefit them long term.

Contactless services manufacturing SMBs plan to offer permanently

 

01 Secure Digital Payment Using Debit, Credit, or Smart Card

02 Ecommerce

03 Mobile Order

Dive deeper into trends across SMBs from more industries by downloading the “Small and Medium Business Trends Report.”
 

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