In recent years, the digital landscape has seen a remarkable influx of small businesses, many of which owe their visibility, and in some cases, their rapid rise, to the power of social media. Platforms like TikTok, Instagram, and X (formerly Twitter) have given entrepreneurs unprecedented access to audiences that once required expensive marketing campaigns to reach. A single viral post can catapult a local startup into global recognition overnight.

But how sustainable is this success? A key question lies here at the intersection of data science and digital marketing: Does short-term virality translate into long-term business growth? Analyzing everything from big-picture business census data to engagement metrics for specific instances of viral small businesses over time can help determine whether social media fame is a fleeting spark or a foundation for lasting success in today’s small business ecosystem.

Socioeconomic conditions shape consumer behavior and household financial capacity. Small business success serves as an essential representation of social and economic status because of its relationship to entry barriers and consumer demand. The general trend of small businesses’ evolution and their relationship to relevant societal changes, like the COVID-19 pandemic, provides necessary context.

Here it is apparent that the total number of small businesses over time fluctuates during and around significant social and economic milestones. The total number of firms began to decline around 2007 and reached its lowest point around 2011, likely due to the Great Recession, which limited access to credit and reduced entrepreneurs' financial capacity. After 2011, there was a noticeable acceleration in firm growth, with an especially sharp increase after 2020. This coincides with the widespread adoption of platforms such as Instagram and TikTok for marketing, suggesting that social media has lowered barriers to visibility and market entry for smaller firms.

The entry and exit trends reinforce this pattern. The sharp drop in net entry during 2006-2009 reflects the financial crisis of that period. Firm exits spiked during the COVID-19 pandemic in 2020, but entries rebounded strongly afterward, resulting in a positive net entry rate, possibly due to social media.

Together, these contextual data allow us to identify a general pattern in small business activity and the factors influencing it: particularly, the widespread adoption of social media as a major driver of recent growth trends.

Although general trends provide insights into the relationship between small businesses and social media, is social media presence an indicator of success and long term sustainability?

The dataset we analyzed offers a comprehensive view of customer interactions with digital marketing campaigns. The boxplot of loyalty points by conversion status shows that social media campaigns with successful conversions generally have higher loyalty points. This reveals that customers who respond positively to social media campaigns are more likely to make repeat purchases, indicating long-term effect and sustained success for small businesses.

The bar chart illustrates that a much larger number of social media campaigns achieve successful conversions. This demonstrates the effectiveness of social media in driving campaign success, highlighting its value in marketing and advertising efforts.

However, when examining conversion rates by marketing channels, channels show similar conversion rates. While we cannot conclude that social media dominates in terms of conversion rate compared to other channels, it still plays a significant role by generating a substantial number of successful campaigns.

While virality can propel a business into the spotlight, long-term growth still depends on fundamentals such as financing. One indicator of small business stability is activity in the U.S. Small Business Administration’s 7(a) loan program, which provides funding for working capital, expansion, and equipment purchases. Over the past five years, the number of 7(a) loans going to established businesses has more than doubled, suggesting stronger lender confidence and improved creditworthiness among mature firms. Although this rise overlaps with increased use of social media marketing, it’s unclear whether digital visibility directly contributed to this trend or simply coincided with broader post-pandemic recovery and policy support.

Yet even as more established firms secure funding and pursue expansion, growth brings its own set of challenges. Access to capital may open doors, but maintaining momentum ultimately depends on a business’s ability to reach customers and stand out in an increasingly crowded digital marketplace. To understand these pressures, we turn to survey data capturing what entrepreneurs themselves identify as their biggest obstacles.

Across these surveys, which were conducted by Meta in partnership with the World Bank and the OECD, American small businesses consistently cite attracting customers as their top challenge. This underscores that visibility remains a central concern, even for businesses with solid financial footing, and it also highlights the growing importance of effective, adaptable marketing strategies, especially those that help small businesses rise above competition, convert attention into actual sales, and maintain customer engagement over time. Importantly, this connects back to our broader question: while social media can generate rapid bursts of attention, sustaining growth requires ongoing strategies that continually bring customers through the door.

Could the rising interest in social media marketing be the solution to this challenge? The graph above shows relative Google searches for Social Media Marketing (blue) and Small Business (purple). Google search interest measures the relative popularity of a search query over time, displayed on a scale of 0 to 100, where 100 represents the period of highest popularity for that specific query within the selected time frame. While interest in small businesses has generally declined since 2003, there was significantly more interest during the pandemic and right now in 2025. Given the uptick in interest in both small businesses and social media marketing in 2025, it is especially relevant to understand how social media virality affects small businesses' long-term success.

To move beyond broad trends and search interest data, it’s helpful to examine how virality actually translates into real-world business outcomes. Social media platforms, particularly TikTok, have become powerful engines for rapid visibility, where a single video can transform a local brand into a household name overnight. However, the real test lies in what happens after the initial surge of attention fades. By looking at specific examples of small businesses that went viral on TikTok and tracing their trajectories since that moment, we can better understand whether social media fame translates into sustained growth, repeat customers, and long-term business viability.

Enchanted Scrunch by Dasha is a small handmade scrunchie shop that unexpectedly went viral on TikTok. Her videos have a cozy, real vibe: sewing at the desk, packing orders late at night, and talking about balancing school and her small business. Her videos gathered a huge wave of attention. As shown in the graph, there are some ups and downs at the start, followed by a sudden jump in April, when her follower growth reached its peak.

But just as quickly as it took off, it dropped. A few months after the peak, the number of new followers basically fell to around zero, and to this day, the account isn't really gaining any new followers at all.

This pattern perfectly matches how most small businesses experience virality in real time. Small businesses like Enchanted Scrunch by Dasha show how social media can give them a place for huge exposure, but not stable success. The gap between going viral and actually surviving long-term is what we want to understand and try to improve. This case demonstrates how short-term virality produces a brief spike in growth, but without infrastructure or retention strategies, long-term traction often disappears.

BOPOMOFO CAFE illustrates how social media alone can’t fully overcome the challenge of attracting customers when a product is highly seasonal. The Asian American café, founded by Phil Wang of Wong Fu Productions and Eric Wang, has six California locations and a strong online presence, thanks to Phil’s 3-million-subscriber YouTube channel.

In October, the café used Instagram to acknowledge the food-and-beverage industry’s winter slow season openly and encouraged followers to support small businesses. They noted that social media can create the impression they are larger or more successful than they are, and chose to be transparent about the difficulty of maintaining traffic in colder months.

Their follower data reflects this seasonality: increases typically occur in the summer, while declines are common in winter, suggesting that social media visibility can’t fully counteract seasonal demand patterns. However, this year the café has maintained steady follower growth even into November, indicating they may be improving at using social media to sustain engagement during slower periods.

This example highlights that even with strong social presence, structural industry patterns such as seasonality remain powerful determinants of business performance.

This data of monthly gained likes for XXL Scrunchie & Co shows how small businesses can earn massive visibility when their content becomes popular on social media. Still, that engagement is difficult to maintain in the long term. XXL Scrunchie & Co is a Canada-based handmade accessories brand started by a young entrepreneur who originally made oversized scrunchies at home and grew her company almost entirely through TikTok, while also using other social media platforms like YouTube and Instagram. Since launching, the brand has become known for its large, colorful scrunchies and “packing order” vlogs.

XXL Scrunchie’s largest gain in likes occurred during November 2022 (over 3.3 million likes in a single month). This growth highlights the kind of rapid exposure TikTok can generate for small creators. This spike coincides with the brand’s viral packaging videos and holiday-season traffic, demonstrating how appealing content and seasonal demand can rapidly accelerate brand growth on social media.

Although the brand has continued to have audience engagement after this spike, their monthly likes tend to fluctuate at levels much lower than before. This shows how even after a period of virality on social media, engagement for a company’s content is only temporary. Even once a business builds an audience and consistently posts, it can be difficult to sustain interest long after the initial viral peak. This long-term pattern reflects a larger trend in the small-business boom on social media where authentic content and direct-to-consumer selling allow small brands to increase their exposure online, but oftentimes only for a limited period.

Overall, XXL Scrunchie & Co’s engagement trend illustrates how one strong wave of viral attention cannot always launch a long-term brand presence, but can increase engagement online and lead to more sales temporarily. Overall, social media has the potential to turn small businesses into successful, recognizable ones, but there are also many barriers to sustaining long-term engagement and growth.

Across our analysis, a consistent pattern emerges: social media virality can spark significant short-term spikes in visibility, sales, and engagement, but these effects fade unless businesses are prepared to convert that momentum into durable operations. The trajectories of Enchanted Scrunch and BOPOMOFO CAFE exemplify this tension; Enchanted Scrunch shows how sudden and explosive virality and visibility can disappear without systems in place for retention or long-term engagement, while BOPOMOFO demonstrates that even a strong digital presence cannot override structural factors like seasonality. Together with the broader trends, as seen in rising 7(a) loans for established firms and surveys showing “attracting customers” as the top challenge, these cases underscore that lasting growth depends on fundamentals such as financial planning, customer loyalty, and sustained marketing strategy, rather than solely on viral moments.

The surge in search interest for social media marketing reflects more than a marketing trend; it shows a shift in what it means to build and run a small business in our current digital era. Entrepreneurs increasingly recognize that while virality offers opportunity, it is not a solution or a guarantee of success in itself. The real challenge and the real evolution lies in learning how to translate digital attention into steady customer flow, resilient business models, and year-round relevance. As small businesses continue adapting to a landscape where visibility is abundant but loyalty is scarce, the most successful will be those that treat social media not as a shortcut, but as one part of a broader, more deliberate strategy for sustainable growth. In this way, virality is reshaping small businesses, not by guaranteeing success, but by redefining the skills, strategies, and resilience required to thrive in the digital-first economy.