The last few years have brought in sweeping changes as to what role small businesses play in the global marketplace. Never in a million years would a business owner think they would be under so many pressures from so many directions, but it has happened and only the smartest and leanest businesses will survive long enough to come out the other end.
From forced business closures, supply chain breakdowns, to emergency level staffing shortages, small businesses have been under constant assault. Unfortunately, many businesses were not ready for these rapid changes and were forced to close. Others, either by smart planning or shear luck, were able to not only survive, but they grew their businesses exponentially.
While 3Bug Media are a small local marketing agency by most standards, we have the ability to work with many small businesses from across several industries and are able to see first hand why some businesses failed while others were able to survive the last few years. There are even a few businesses that had their best years during the pandemic..
From my first hand experience, the businesses that really struggled the last few years shared the following traits:
- They were businesses with physical locations were their storefronts made up 100% or close it as far as their revenue.
- They carried large debt obligations and ran businesses that routinely incurred unnecessary debt, thinking times would always be good for them.
- They were not streamlined and efficient with their business and sales processes, costing them greatly in both time and money.
- They had higher than normal employee turnover and did not invest in their employees in terms of compensation and training.
- They were set in their ways and slow to make changes.
The businesses that actually did even better over the last few years shared the following traits:
- In addition to any local retail or office locations they had, they also were able to sell their products and services online and in other markets.
- They were more nimble than most businesses, ready to make pivots and try news things fast.
- They treated their employees well, many stayed with them during the pandemic and worked when they could have sat home and got paid by the government instead. Their employees considered working there a long term value and were invested in the business.
- They always looked at keeping their expenses and debt load low so they had less cashflow issues than most small businesses.
- They were optimistic, even when it appeared they shouldn't be.
You can see from the above lists the businesses that did poorly had similar traits, as did the businesses that did exceedingly well. With that said, here are my suggestions if you want to harden your business and not only keep it alive, but have it thrive in times of crisis.
Expand Your Footprint
If your business relies primarily on a local storefront or service area and does not absolutely need to be, start making changes now. We have seen local and federal governments do things that were unheard of a few years ago. Most businesses would never dream of their local government forcing them to close their doors for extended periods of time, but it happened and will likely happen again.
While some businesses may be tied to a specific geographical area (think locksmiths or auto repair shops), many businesses are not, they just think they are. If you can sell products in a storefront you can also sell them online or in other markets outside your local area. If you see clients in your office, you can also see them virtually using various online meeting and communication tools like Zoom or Ring Central.
Expand your footprint and potential customer base beyond your local area. Start making the investments in ecommerce or online communication tools now before you need them. Even if things are ok for you now, start getting these things in place so if something crazy happens, like a forced closure or local disaster, your business can still operate.
Develop New Marketing & Sales Channels
If you can sell your products in your storefront then you can sell them on your website. If you can sell them on your website then you can sell them in 3rd party marketplaces as well.
Multi-channel retailing can provide several avenues to sell your products and reduce your exposure if any one channel dries up or is shut down. For product sales, think of your own ecommerce store as well as marketplace sites like Amazon, Ebay, and Etsy. Even retailers like Walmart have opened up their website to 3rd party sellers. Some of these platforms can be difficult to learn and master, so working on them now will give you the confidence to pivot if you ever have to.
And if you sell services, aside from servicing clients in your office or locally, look at offering services virtually or at least to a wider geographic area than you currently do. Virtual consultations became very popular during the pandemic and both businesses and clients have learned to make virtual visits work for them. Also look at 3rd party marketplace sites where you can sell your services. For construction, sites like Angie’s List or Houzz are great for getting new clients while a site like Psychology Today is a great platform for therapists to find clients. Whatever industry you are in there are places online to sell your services. Upwork is a favorite of mine, you can sell just about any service there.
Keep Expenses Low
It is difficult to operate effectively in normal times when you carry a lot of debt, it is almost impossible to do so during a crisis. That goes for both personal and business finances. High debt loads can cripple a business so do your best to stay as lean as possible.
I saw first hand businesses that either had very high debt loads or little by the way of cash/credit close their doors within months of the pandemic starting. They had nothing in reserves to see them through when the hard times hit.
That’s not to say you should never take on debt, sometimes taking on debt is a good thing it it can lead to positive long term gains for your business. But the way you spend your money in good times will determine what happens to your business in bad times.
Be Smart About Hiring
Employees are giving small business owners two major headaches right now. One is actually getting enough staff to work and the other is the rapidly increasing payroll costs.
Businesses that do not pay and treat their employees fairly found out the hard way there is little loyalty from their employees. They were more than happy to stay home and collect government checks while the business owner literally ran the entire business themselves, usually to exhaustion. Loyalty to your employees in good times will breed loyalty from your employees in times of trouble. Businesses that invested in their employees got paid back over the last 2 years from thankful and loyal employees.
Businesses have also been hit with skyrocketing payroll costs. Some businesses had to cut staffing while some just passed on the costs to consumers, which can also lead to less customers and sales if not handled right. There is no clear solution to these staffing issues but the key point is to be very strategic with your hiring. One great employee you hire and train right can do the work of two mediocre hires with less payroll costs. It is also much cheaper to retain good employees than constantly have to train new hires.
Think Long-Term Survival
Most small business owners can’t think past the next month, let alone plan years in advance. It’s tiring fighting constant daily battles to really think strategically long term. But that’s what you need to do if you want your business to survive the rapidly changing environment.
The deck is stacked in favor of large corporations, franchises and big box stores, the government would rather deal with a few large partners than worry about hundreds of thousands of small businesses. It’s the sad truth and the reality of the last few years proves it.
Small businesses can still survive and even thrive against much larger competitors, but simply carving out a tiny space in your local town is not going to cut it in the long term. There are too many forces out there fighting against you. Be a small business that thinks big. You don’t have to be big, but you need to think big.
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