There is a new small business ecosystem with an attitude of renewal. It is important you are prepared for it.
Many small businesses hoped 2020 would be their year. Then, the pandemic hit, and its impact around the world has been unprecedented.
It's hard to pinpoint the economic fallout exactly at this point, primarily because we're still in the middle of the pandemic. But 44.6% of small businesses say they've experienced a "moderate negative effect." Moreover, further research has shown that one-fifth (21%) of SMEs reported that they risked permanent shut down within three months.
With no end of the disruption in sight, small businesses are refocusing their efforts in a search for answers like how to manage record-low sales or create a six-month forecast that conveys anything but record-high layoffs.
In this article, let's address the new small businesses ecosystem with an attitude of renewal. Use this as a checklist to make sure you're ready for whatever 2021 might throw your way.
Are you in front of evolving consumer trends?
Male grooming is just one of the many markets that have been hit hard by the pandemic. This is because lockdown has forced consumers to behave differently, and consequently shop differently. Many people are stuck indoors, their incomes may have gone down, and thus their habits have changed.
This has also led to a change in priorities. Personal finance is for many a primary concern. Consumers feel the pinch and recognize the need to tighten their purse strings. Every day matters that were once trivial (such as shaving every day) now matter a lot less.
The prospect is that consumers may continue to want different products in the long-term. So, you need to get to grips not just with a pandemic, but also with changes in your customer's shopping preferences. With a closer look at how habits have changed during the lockdown, you can get a better idea of what your customers' buying habits might be like in the long-term and how you should change your growth strategy, too.
Do you have remote work systems in place?
It's no secret that most of the world’s population has been forced to work from home. The familiar office has been replaced with an individual's home study, bedroom, kitchen, and garden.
Fortunately, this has come with a few benefits. For example, home workers spend less time on the commute to and from work, they can operate a more fluid schedule, and their productivity may even rise. In some sectors, such as customer service, they may even be more likely to avoid burnout.
Naturally, you must also be aware of the potential pitfalls too, such as social isolation, a dip in morale, and getting to grips with new technology.
However, once you are able to iron out all the kinks, you may want to offer your productive and happy employees the chance to work from home more often in the future. This means you'll need to ensure all bases are covered, including staff education on new technology, and leveraging online solutions such as cloud-based apps and remote video software.
It also means you need to find ways to reduce the negatives of working from home, such as the aforementioned social isolation.
Are you watching the changes in your customers' behavior?
In addition to consumer demand for different products due to the pandemic, they've also changed the way they shop.
What does this mean?
E-commerce has thrived more than ever because more people have been forced to shop online. In the US, consumers spent $211.5 billion during the second quarter of 2020 on e-commerce, up 31.8% from the first quarter, according to data published by the US Census Bureau.
Indeed, in many areas around the world, brick and mortar stores have had to suspend operations for months at a time. In 2021, you will do well to focus more on your online operations.
Keep in mind that the shift is unlikely to be temporary. While the UK has announced a possible online sales tax that is designed to protect brick and mortar retailers, you have to look at the long-term and consider that a higher percentage of sales will be made online, not just this year, but in the years to come.
As Nielsen points out, lots of consumers are driven by the desire to stay safe. Even if lockdown is lifted in some parts of the world, there will still be a number of consumers who will prefer to shop online out of concerns for their own safety.
Once the idea of online shopping becomes the norm, it may be a habit that's hard to change.
What you can Do to make sure your business is 2021-proof
Consumers shop and behave differently now, and small businesses need to adapt and brace for further disruption.
But what changes do you need to make to operations for next year to ensure your business bounces back from this strange period?
1. Cut back on unnecessary expenses
The applecart has been upset in a few ways. One of the areas it’s hit businesses the most is in the pocket. As a result, cost-cutting strategies have been implemented by businesses all over the world as they struggle to stay afloat amidst economic uncertainty. After all, positive cash flow is key if a business is to survive.
Here are a few ways you can reduce expenses and innovate:
Defer your bills - Reach out to any banks or lenders you use and see if you qualify for a forbearance. For example, you might be able to suspend loan repayments.
Go remote - We touched on this earlier, but it's important to note that you might pay rent on leased office space that you may never need to use again. Consider an overhaul of your business to boost employee satisfaction, but also to cut costs.
On the other hand, if you choose to keep your office, you could at least negotiate better terms on any new leases now that demand has shrunk.
Reduce payroll expenses - No one wants to reduce payroll expenses, but because this is likely your business's biggest expense, you may want to look at it. Support your employees as best you can, so to safeguard their future and the future of your business, you could reduce their hours. This will guarantee them a paycheck, and it will also ensure your business can keep running.
Cut unnecessary expenses - Overhead costs such as maintenance, office supplies and utilities can really put a strain on your business during COVID-19. Have a look at your monthly expenses and see what can be cut.
2. Create an official work from home policy
A work from home policy is an agreement that lists everything needed to allow employees to work remotely. Creating a strong work from home policy ensures that your company’s expectations are clear, and everyone is held to the same standards.
This is essential, as 88% of businesses either invited their employees to work remotely during COVID-19, or made it mandatory. However, even before the pandemic, 3.4% of the American workforce was already working from home - and 67% said that they were more productive.
However, remote work benefits aren’t confined to employees. Remote working can greatly benefit the organization, too:
Fewer business expenses (you can save money on things like office space and equipment)
Access to a wider range of applicants (and therefore higher quality candidates from all over the world)
Improved employee retention (studies have shown that remote workers are 13% more inclined to stay loyal to a company).
If you decide to create a work from home policy, you’ll need to make sure you spend time training your employees in the latest technology and software, such as communication tools and collaboration tools.
3. Ramp-Up Your digital activity
As we’ve seen, consumers are changing the way they shop, which means brick and mortar stores need to start embracing eCommerce. COVID-19 has certainly influenced the change in consumer habits, but expectations are rife that online shopping is set to become the new normal. Indeed, online sales are expected to reach $4.5 trillion by 2021.
Switching from brick and mortar to e-commerce can be challenging, but there are tools and software to guide you along the way. For example, there are online selling platforms you can sign up to, services to help you handle shipping and fulfillment, and remote workers to help with everything, from web design to copywriting. Other things you can use to assist you include implementing strong payment providers that let consumers pay how they want.
However you do it, it's important that you target your audience during this period with a more aggressive digital marketing strategy. This will ensure they know where they can find you, and it will also help you to raise brand awareness and build new relationships as you go about this new change.
No one knows with any degree of accuracy what the next few years might bring. But it’s crucial that you react quickly to change so that you're not left behind.
Recent events have disrupted the way businesses operate, and while there's we can't tell whether all of these will be permanent, you need to do all that you can to ensure the safe future of your business, and your employees.