Thanks to our friends at Xero
Running a small business is hard enough without being blindsided by a global pandemic. But 2020 has thrown us the biggest, toughest curveball we’ve ever seen.
Yet it’s also been a year where small-business owners have stepped up like never before. Where they’ve gritted their teeth and shown their strength. If you’re a small-business owner, resilience is in your DNA, right? And you probably know that these in-the-trenches times provide an opportunity to regroup, focus on the future and implement changes to not just survive COVID-19, but thrive in the years ahead.
With small businesses representing over 90 percent of the world’s companies, our friends at Xero commissioned a global study conducted by Forrester Consulting to deep-dive into the true impact of COVID-19 on small businesses, and the strategies that have proven successful in mitigating its impacts. The Next Chapter for Small Business interviewed small businesses around the world, including Australia, the US and the UK – these are the key recommendations that were uncovered.
Get your finances in check
Cashflow was the biggest challenge faced by small businesses across the global during the pandemic, with 58% reporting that their cash flow position got worse. Leveraging tools to keep up-to-date company and financial information accessible is no longer just an admin task, it’s absolutely critical to the survival of your business.
Top takeaway: Get your house in order: make sure all your company and financial information is easily accessible and digitised.
Build meaningful connections with your customers
Even though small businesses have been hurt this year, support for them has never been stronger (we love #supportlocal). 81% of consumers across the globe said that small businesses play an active role in shaping the culture of their local communities, and 93% of consumers will trust, recommend and buy from businesses that demonstrate empathy. For example, a Sydney-based gin distillery partnered with and purchased smoke-tainted Shiraz and cabernet sauvignon grapes from wineries badly affected by the 2019- 2020 Australian bushfires to make brandy and other spirits (#genius). This created a meaningful connection and buzz as customers eagerly awaited their Shiraz gin.
Top takeaway: Small businesses should understand the personalities, values, and personal histories of their customers, and work to create emotional connections with them.
Don’t be afraid to ask for help
Smart small-business owners know there’s power in their ecosystems during the rad times and the bad times. Don’t be hesitant to leverage partnerships and resources, whether it’s support from state and federal governments or associations with other small businesses – they can make or break the success of your business. The study showed thriving businesses are most likely to get help from their ecosystem partners; over half of small businesses say they need other small businesses to survive, and half of small businesses believe large enterprises are valuable partners.
Top takeaway: To find out what help is available to you in your ecosystem, check with your accountant or bookkeeper.
Embrace digital and cloud-based tools
Small-business owners throughout the globe increased their online presence to engage better with customers during lockdown, with 49% using cloud technology during COVID-19, up from 32% in 2019. In short, businesses have embraced digital like never before, and are all the better for it. In the long-term, this can only be a good thing: manual, paper-based systems are not only time-consuming and environmentally unfriendly but are also labour-intensive – which comes at a higher cost for minimal value. So, whether it’s improving your customers’ online journey or throwing out your filing cabinet and using cloud storage instead, increasing efficiency will only fast-track your success.
Top takeaway: Cloud-based software practice management applications and collaborative tools will help you save time and increase accuracy.
Use data to prepare for the future
While you can never predict when a pandemic is going to hit, you can help prepare your business for unprecedented times. Small businesses are generally unprepared to deal with disruptions to supply chain or customer demand and need to take a strategic approach when it comes to planning their responses. Some are working with partners in their ecosystems to understand the impact of the pandemic on their businesses, using a variety of sources of data, such as location and sector, to future-proof their businesses. The study showed that thriving businesses plan ahead to the best of their abilities in order to stay agile.
Top takeaway: Be proactive, not reactive, and harness data to ensure your small business can weather any future storms.
While many small businesses will undoubtedly have a long, bumpy road to recovery, they also have an opportunity to refresh and plan ahead. By making considered, long-term plans and partnerships, and keeping community at the heart of everything, the future for small businesses looks bright.
Check out our small business hub for more info on mastering the ins and outs of small business life – now, and into the future.
This helpful content was brought to you in partnership with our pals at Xero. Whether you lead a small team or are going at it alone, you’ll find the support you need on Xero’s dedicated resource page – complete with free tools and guides to help you run your business smoothly. Online accounting software that’s designed to let you do business beautifully and simply, nab a free 30-day trial over at xero.com.