Running a small business is tough. Competing against larger competitors with deep pockets is a constant challenge on a shoestring budget. Four companies making it easier for small businesses thrive are Q2 Holdings (NYSE:QTWO), Shopify (NYSE:SHOP), Square (NYSE:SQ) and Mindbody (NASDAQ:MB). These fast-growing tech companies provide cloud-based platforms that handle key functions for small businesses at a low cost, and their shareholders are enjoying the results. 

Read on to find out more about these innovative companies and how they are helping their customers succeed.

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Q2 Holdings

Q2 Holdings helps regional and community financial institutions (RCFIs) provide web and mobile banking solutions for their customers. These RCFIs strive to serve customers in a personal way with a local presence. But with mobile technology advances, customers are demanding online solutions to avoid a trip to the local bank branch. Since these smaller banks don't have large information technology teams, this is where Q2 comes in.

Q2 enables RCFI's to provide account holders tools such as remote deposit, peer-to-peer payments, and access to their accounts via the web or a mobile app. On the business side, Q2 has products for ensuring secure and private access to accounts, tools for handling disputes, and even a machine learning application called Q2 Smart that analyzes account holder patterns to suggest additional services they might use. Q2 has products to help handle commercial accounts too so that the RCFI can fully serve the needs of the local community.

Q2's customers love the platform. With a customer churn rate below 5% and 29% revenue growth in 2017 on a flat customer count year-over-year shows that customers are sticking around and adding more of Q2's services to their arsenal.

Graphic of a cloud network with a globe in the background.

These platform companies serve customers with software in the cloud paid by a monthly subscription fee. Image source: Getty Images

Square and Shopify

Square and Shopify serve a similar set of customers with a comparative set of products but have gotten there through different paths. Square started with a device to collect in-person payments with a mobile app. This turned out to be incredibly powerful for entrepreneurs and the company expanded its offering into a suite of products for the small business owner including employee payroll, sales analytics, marketing, and much more. The company looks at its gross payments volume (GPV) as an important measure of its success and given the company's $17.9 billion in GPV in Q4-2017, a 31% year-over-year growth, it's performing its mission to serve its customers well.

Shopify also has a set of software tools that enables small business owners to act like a big company, but it started as a software platform for merchants to build e-commerce websites to sell their goods online. Shopify expanded into an ecosystem that is focused on making the merchant successful: inventory, marketing, shipping, collecting credit card payments in person, and even business loans. Shopify is growing at a rapid pace and has eclipsed 600,000 merchants and had $9.1 billion in gross merchandise volume (a 65% year-over-year increase) on its platform in Q4-2017.

Even though these companies compete for many of the same small business owners, both Square and Shopify estimate their addressable markets as many multiples of their current size and have plenty of room to grow.

Mindbody

Mindbody also has a platform to enable small business owners to run their business but focuses on a niche set of customers. Mindbody serves boutique fitness, salon and spa, and integrative health establishments. These businesses bring a unique set of challenges including privacy of health data and scheduling appointments and classes.

Its platform's capabilities have grown to include everything from mobile bookings, staff management, payments, marketing tools, and more. One feature that's been recently added is the ability to dynamically price its available inventory of classes to attract new clients and maximize the number of participants in each class.

The company has been successful serving this customer set and has over 58,000 customers on its platform, which racked up $2.1 billion in payments in Q4-2017, a 23% year-over-year increase. Mindbody has a huge market opportunity of 4.2 million wellness businesses around the world that's growing at over 10% annually, so the company has plenty of room to grow by helping these niche small businesses succeed.

Invested in their customers

One thing about these platform companies that makes them attractive investments is that their success is aligned with their customer's success. These companies either take a cut on the transactional volume of payments or get financial benefit when its small business customer grows. This alignment constantly reinforces the company's mission to provide the best service to its customers. With small businesses optimistic about their future, it might be time to consider adding one of these tech companies to your portfolio.

Brian Withers owns shares of Mindbody, Q2 Holdings, Shopify, and Square. The Motley Fool owns shares of and recommends Q2 Holdings and Shopify. The Motley Fool owns shares of Square. The Motley Fool recommends Mindbody. The Motley Fool has a disclosure policy.