Business growth is still possible in the face of uncertainty. There are ways to build up on confidence, resilience, and ingenuity to keep your business moving into the future.
Text paid for by Xero | The Guardian
Small businesses that can see disruptions as a path towards reinvention are well equipped to figure out how to move forward, despite the challenges.
As business trading evolves, we are all looking for signs of optimism, evidence of progress, and sparks of innovation in the business landscape. And there is cause for hope: following the first national lockdown, while two in five small businesses were forecasting a loss of revenue, almost one in 20 had prospered, according to a Xero survey of more than 1,000 small businesses in early June.
In the face of global uncertainty, unpredictable customer demand is to be expected. With the concept of “business as usual” out the window, small businesses have been forced to shape-shift under new waves of lockdowns and tightening restrictions across the country. From moving bricks-and-mortar stores online to the digitisation of payment processes, they’re rethinking the way they do things – often unlocking new ideas and systems that will endure long after this crisis ends.
Even if not originally part of the plan, these adaptations can help businesses work towards finding a new balance between maintaining productivity and remaining profitable.
Finding new ways to innovate and reach new heights – rather than just get by – is a challenge you shouldn’t have to rise to on your own. Here are some considerations to keep in mind as you plan and rebuild for operating in a new world.
What’s the secret to business resilience?
Almost two in three (60.3%) of those surveyed by Xero believe resilience is the most important characteristic for a small business to remain successful when Covid-19 has passed. But what does staying flexible and enduring tough challenges look like in real life?
Business planning – or updating existing documents related to operational matters in line with the challenges of navigating a pandemic – allows owners and founders to change existing approaches and try new things. This could mean:
● Testing new products and services in an agile way before scaling up to meet customer demand
● Planning for inevitable changes rather than resisting (or reacting to) unforeseen obstacles
● Reviewing and revising plans alongside trusted advisors such as an accountant or bookkeeper
● Letting go of nostalgia for the way things were before, to make the most of the current moment
● Seeing change as a long-term adaptation or skill set rather than temporary or a stopgap
● Embracing technology, data, and research to learn as much as possible and make well-considered decisions
You might even find courage in rewriting the rule book during a challenging time. It’s a chance to remind yourself why you started your business, and map out new possibilities for growth and creating opportunities. According to Xero’s research, being customer-centric (43.2%), having a long-term vision (47.8%), and agility (43.7%) were the other traits that business owners believed were essential to remaining viable and rebuilding strong foundations for success.
How to tell the difference between thriving and adapting as a business
The impacts of Covid-19 have been unrelenting, and have thrown usual day-to-day processes into a whirlwind for many small business owners. So what’s the difference between thriving and adapting to changing conditions?
Small businesses that are willing to think like agile startups are more likely to succeed in the long run. Don’t be afraid to take on new responsibilities and learn new skills, and work with your team to test out different business models and pricing structures.
Reach out to your network to help make things happen. When customers become your advocates, your local community can have a much bigger impact than when you simply rely on yourself or your team to spread the word. Most importantly, absorb and learn from failure so you can make better decisions tomorrow.
Thrivers are more willing to self-invent and express long-term positive sentiment despite visibly negative impact on growth and revenue.
According to Xero’s survey research, thrivers are also more likely to:
● Employ between 5 and 19 employees, and have a turnover of more than $1 million
● Belong to Gens Y and Z and be more open to digital or agile ways of working
● Be less than a decade old as a business, and in the development, startup or expansion phase
● Represent industries such as manufacturing, agriculture, forestry, fishing, hunting, and wholesale trade
Adapters are hoping to rebound soon, see change as a necessary force, and are still learning to build their resilience.
According to Xero’s research, adapters also more likely to:
● Be investing in tech in the next six months
● Be less than five years into the growth stage of the business
● Represent industries such as finance and insurance
The upside of investing in tech to make change possible
Businesses with a future focus saw the shift toward moving online, allowing employees to work remotely, digitising payment processes, and operating an online store as a natural way forward, according to Xero’s Rebuilding Australia report (which is informed by the wider survey research shared within this article, as well as ABS data and anonymised and aggregated customer data from Xero Small Business Insights). This year’s global events have only fast-forwarded that process.
As you make some vital investment decisions in the next couple of months, here are some tips and considerations for where to put your money and efforts:
1. Do put the customer first
As you streamline your processes and introduce new equipment and software into your workplace, don’t forget to think about how these changes will affect your customers and their purchase decisions. Remember to communicate any big changes to customers as early as possible, and seek regular feedback on how tech implementations improve the overall customer experience to stay on the right track.
2. Do use cloud software to make working remotely a reality
Businesses that thrive are more likely to use cloud accounting. Xero found that 71.9% of businesses that thrived during Covid-19 used cloud accounting. In contrast, only 42.7% of businesses that were hit hard by the pandemic used cloud accounting. Switching to the cloud offers flexible access, better collaboration, and improved business efficiency and scalability.
3. Do invest in your people
The faces behind your product or service can make all the difference. To keep your staff happy, engaged and motivated, invest in software that helps them be more efficient and innovative at work. Businesses that thrived during the early days of Covid said they wanted to invest not only in sales and marketing (46.2%), but also personnel and project management (30.2%).
What does it really mean to ‘pivot’ your business?
Less than one in five businesses see their response to Covid-19 as short-term. All of which points to the fact that pivoting, in the current environment, should not be misunderstood as simply reacting to change. According to Xero, many small business owners struggled to make key business decisions, and instead relied on their gut instinct (50.7%) or assumed things would largely return to normal once Covid-19 had passed (26.1%). However, businesses that managed to thrive and adapt were much less likely to make that assumption. Instead, they invested in research, digital tools, agile consumer testing and business advisers.
It’s still unclear what a post-lockdown world will look like in the long term. Still, those who embrace positivity and opportunity will be able to find new customer markets, change the way they do business in a big way, prioritise personal and professional growth, and rebuild for a better customer experience.
As you adjust to your surroundings, it’s OK to recognise that progress may not be smooth or perfect. It’s entirely reasonable for there to be phases of rapid recovery and plateaux – especially as restrictions tighten and ease across the country.
If change is the only constant, then embracing it and learning how to adapt in response can lead to great things for Australian small businesses navigating the way forward.