4 Tips for Using the Gig Economy to Grow Any Small Business
A great example of the gig economy is Uber- a company that provides one specific gig at a time. Another great example is Fiverr, a marketplace for people to advertise their gigs, inviting website visitors to buy a specific service for the cost of just one project, like creating a business logo.
All is well in how the gig economy functions, but it places strain on traditional businesses. Most small businesses rely on long-term employment and customer lead development for making ongoing sales.
Chances are the world is going to continue shifting into a gig-economy model. Businesses will need to find new ways to bring value to customers or risk going under.
For the small business owner or startup team, the rise of the gig economy should not be ignored, because although it might seem an uncertain path to take, there are a lot of growth opportunities that can be taken advantage of.
Let’s have a look at a few ways that your small business can utilize the gig economy to your benefit.
1. The gig economy offers the opportunity for short-term, project-based labor
Traditionally, companies will spend enormous amounts of time and money on hiring and training their staff. According to this article from NPR, Amazon is forecasted to spend $700,000,000 on training staff over the next six years.
That might not seem like a lot, given the companies astronomical margins, but for a startup or small business, hiring new staff can take away valuable time and money. These resources could likely be put to better use in other aspects of the business (like advertising).
The gig economy offers short-term, project-based labor for businesses of any size. Why spend the time training and developing employees to do a certain job, when you can find someone with 10x the experience online for a fraction of the cost? As a record label owner, it would be silly for me to hire a full-time visual design team when each of our projects and releases are one-of-a-kind and creatively different.
Instead, I would consider hiring one person to oversee the assets, then utilize the gig economy to hire one-time contractors for individual releases.
Another benefit of the gig economy is that if a business partnership or contractor doesn’t perform at the level you need, you don’t have to bring them back. Companies spend copious amounts of time and energy on resolving internal disputes. With one-time workers, you can pick and choose as appropriate. Sometimes, going separate ways is the right thing to do.
2. The gig economy allows for more personalized customer service
It used to be that all companies were attempting to adopt the one-stop-shop business model. While this is still the case in the marketplace industry (like Amazon, for example), other industries are finding that customers are willing to shop for a specific service or product and choose the best option available, instead of finding a business that tries to do everything.
In the world of small business, every customer pain point feels important, but the gig economy model says that solving every issue is not the right approach.
By becoming a specialized service that solves a particular customer need, small businesses can provide much more value. It’s better to start with several raging fans, as opposed to a lot of impartial shoppers. Plus, this way, your business has more opportunity to grow into new segments down the road
- it’s good to plan your business from the start.
3. The gig economy allows your company to become the middle-man
The concept of the middle-man might have a negative connotation at first, but think about how relevant (and useful) it is today.
Customers know that there are hundreds, if not thousands, of ways to purchase a particular product or service online. Because of the copious offers out there, customers now have to spend their time browsing and finding the best available option (best deal, fastest shipping, best quality, etc).
Even within the Amazon marketplace, there are many sellers trying to sell the same item. It can be annoying to have to dig through the reviews (which are often fake) and find the best product.
That’s exactly the kind of problem that a middle-man business can solve in the gig economy. A great example of this is the Bangyourbuck website, which compiles all of the products on Amazon and allows customers to find the very best deals, on a cost-per-unit basis. Now, customers can evaluate which bag of kitty litter has the most value per-pound or whichever measurement is most relevant. Now that’s value.
For small businesses, becoming the middle-man could mean becoming a well-connected entity in your niche.
If your company is focused on selling hiking boots, perhaps you could also become a distributor of season passes to mountain resorts in your area? People who are searching for hiking boots and know that your company is the very best at making them would find value in knowing which mountain resorts you recommend.
The gig economy also allows for businesses to enter the affiliate program world (which is different than affiliate networks) and help customers solve their problems by finding the best solutions for them. Kind of like a solutions agent!
4. The gig economy allows for small business to expand globally, faster
Building off of our first point about having access to one-time project labor, the gig economy also opens the door to labor from all around the world. This could be especially advantageous to businesses that are looking to set up operations in new locations.
For example, a pizza company may decide it wants to start putting its billboards in a neighboring city, due to an increase in commuter traffic from that area. People travel downtown for work, and it makes sense to advertise in their home areas so that they drive to work thinking about pizza. However, the pizza company may not necessarily know the best billboard to place their signage. They might not be aware of regional dialects or other elements that are relevant to advertising in that area.
By hiring a local gig-worker to help, they can gain valuable insight into the community’s preference for virtually anything, provided the gig-worker is in the know. Think about this on a global scale- you can gain insight by hiring project workers from another country, anywhere you are planning to expand business operations.
For the small business (especially if it operates primarily online) this means gaining valuable insight into which types of ads a particular region responds best to, or perhaps understanding slang that can make their marketing more accessible and relatable.
Time is critical in business. The gig economy can help expedite many aspects of deliverable services, resulting in faster growth.
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