The last few months have taught us a lot about our world’s small businesses. They’re incredibly strong, determined and resilient in the face of adversity. However, this does not diminish the hardships and suffering small business owners have encountered because of the worst economic crisis in 100 years – with many facing permanent closure and, ultimately, life-changing decisions. If we’ve learned anything from 2020, it’s important to future proof your business.
Even those with the best-laid plans, business models and growth strategies were thrown for a tremendous loop by this pandemic. However, many pivoted to pursue new revenue streams.
One example is Museum Hack, a New York-based small business that depended on physical walking tours of museums.
The team that runs Museum Hack now does the following:
- Offers virtual team-building activities for corporate groups
- Operates as TeamBuilding
- Doubles their monthly revenue numbers
We have learned a great deal from the businesses that pivoted and survived the initial downturn. This includes what ultimately helped them come out on the other side and, in many cases, thrive. Xero, recently released a commissioned study conducted by Forrester Consulting. It closely examined the impact of COVID-19 on small businesses and identified key themes that enabled them to pivot.
As the U.S. is now seeing a rise and record number of daily cases, businesses brace again for their impact. Thankfully, you can use new tools and information, such as from this recent study, to future proof your business. The following lessons gleaned from the research can serve as a guidepost for businesses as we enter uncertain months to come.
1. Take your finances digital
To manage their finances seamlessly and understand their cash flow position at all times, small businesses should go digital. Countless small businesses struggled with cash flow during the first wave of COVID-19, resulting in revenue reductions. They also had difficulties applying for and receiving government support. Having financial information ready greatly improves the ability to apply for federal aid and understand where a business is suffering.
2. Improve customer engagement through emotional connections
It’s clear that as societal norms shift, customer expectations shift too. The study found that nine in ten (93%) of consumers will trust, recommend and/or buy from businesses that demonstrate empathy.
Today’s small businesses should make a concerted effort to do these two things:
- Think critically about what their customers need during this time (i.e., the consumer experience safer and more seamless
- Offering alternative ways to access goods and services
3. Engage the ecosystem
A small business’s survival can depend on its ability to leverage the resources available through its ecosystem. Some examples would be partners, a network of other business owners or even an accountant or bookkeeper. Those that have thrived during the last few months took advantage of help from governments, partners and communities. They knew where to turn to first within their ecosystems.
4. Save time with the cloud
Cloud adoption not only allows businesses to operate more efficiently. The use of cloud-based tools also allows them to engage with customers more successfully. Digital engagement and the cloud are becoming more important and prevalent than ever. Business owners and financial professionals who efficiently use the cloud will also save valuable hours crunching numbers and monitoring cash position.
5. Prioritize planning to future proof your business
While it’s certainly not possible to plan for every outcome, knowing what it will take to respond to another crisis will increase the probability of survival. This can include diversifying products and services to reach a wider audience. Another smart move is leveraging data and insights to make informed decisions with future supply chain/financial disruptions.
Operating a small business is no easy feat. However, it’s important as business owners to apply what we have learned from the last shutdown and become more prepared and versatile than ever.
By Rachael Powell, Chief Customer Officer, Xero
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