Small Business

What 3 things small businesses need to do next

May 29, 2024 | By Rachel King
The good news first: Despite economic turbulence, small businesses are growing.

“We’re seeing elevated levels of business formation and job openings at small businesses,” said Roiana Reid, senior U.S. economist and data scientist for the Mastercard Economics Institute, at Mastercard’s Small Business Summit last week in New York City. “Small business survival rates are up from their lows, especially in the service sector, which is very encouraging.”

And now the … good news? Small businesses forced to quickly pivot to digital during the pandemic in order to survive now have even more tools and technology at their disposal to grow, panelists said. Here are three key ways to get ahead.

Embrace AI to connect with customers

Small business owners wear many hats, constantly juggling tasks and struggling for time. Artificial intelligence is emerging as a powerful tool to help them streamline and automate some of their responsibilities. In the area of digital marketing, AI can personalize email marketing messages and draft social media content; in customer service, AI chatbots are increasingly sophisticated and human-sounding.

Derek Canton, the CEO and co-founder of Paerpay, a Boston-based startup specializing in contactless payment solutions, said these AI-powered tools can give businesses a crucial edge. During the pandemic, he worked with restaurants to implement QR codes for touchless payments, and more recently he began offering an AI-based omnichannel communication tool that allows customers to have an entire conversation with the chatbot to ask questions, make reservations, place orders and more. And after the conversation ends, the AI system sends a text message with all the information they requested and keeps the chat open for follow-up queries.

“We started selling QR codes to restaurants before it was sexy to do so,” Canton said. “And then it was like QR codes were this thing, and it works with small businesses.”

Starting with a small goal — as Paerpay did with customer service — is the smart way to get started with AI, said Traci Spiegelman, vice president of global media at Mastercard.

“AI is so big and so overwhelming that it’s scary, right? It’s like “Oh, where do I start?” Spiegelman said. “Think about the greatest impact that you can have with even just that small use of AI.”

Prioritize cybersecurity to build trust

Hackers are increasingly targeting small businesses, since those enterprises often don’t have the resources or expertise to protect themselves.

“The hacking is for profit,” explained Corey White, founder and chief experience officer for, which offers subscription-based cybersecurity protection for small businesses and supply chains, at another panel. “If they can hide and continue to look into your account and see how much money you have, then they lock up all your systems in crypto and then you have to pay that ransom. That’s why it’s so important for [small businesses] to understand what these hacks look like.”

“Presenting yourself as a secure organization helps protect you from heavy financial loss while enhancing your brand reputation,” said Ron Talwalkar, vice president of business development, digital partnerships and fintech at Mastercard. “There are so many things beyond just money. You lose that, and reputation is a big problem. You don’t want that on your record.”

Harness data to access credit

Securing funding remains a major challenge for small businesses, particularly in today’s inflationary environment. Having the right data can help.

There are three key steps to finding funding, said Matt Brewster, chief financial officer of Hello Alice, an online platform designed to assist entrepreneurs and small-business owners: knowing your business’s financial health, understanding the landscape of financing and funding options and, of course, applying for those options.

Open banking — a framework that allows people to proactively share their financial information with third parties to access innovative services — is helping streamline this process. Brewster noted that more than half of Hello Alice’s financing partners are using open banking in some way to bring more value to small businesses.

Open banking can help entrepreneurs establish credit history and obtain loans at an attractive rate. It can give lenders a more complete picture of a business’s financial health, which can make it easier for businesses to qualify for loans. Open banking data can be used to analyze business fundamentals, tailor financial products and evaluate businesses for financing.

“We think open banking is a game changer,” Brewster said. “You’ve got to pursue it.”

Rachel King, contributor