Whatever was on your New Year resolution list at the start of 2020, nobody could have planned for this. As we approach the end of a year most would rather forget, it’s a good time to reflect on some of the ways small businesses have pivoted, adapted and thrived amidst the challenges. So what sets those businesses apart?
The Next Chapter for Small Business, a Forrester Consulting study commissioned by Xero, investigated how small businesses in key global markets have responded to COVID-19. It identified a number of commonalities amongst small businesses that have been able to thrive in the current landscape.
These insights should serve to help encourage small business owners to take the time now, to reflect on how they can build resilience into their businesses today, and better prepare them to navigate any surprises that may come tomorrow.
Getting the right support from technology
As lockdowns and social distancing measures came into play, the ability to sell online became more important for operators than ever, with 53% of small business revenue coming from online channels as opposed to physical stores during COVID-19 — 12% higher than in 2019, according to the Forrester study. But it’s not just support from technology to sell online that’s an important factor for success.
Common features within businesses found to be thriving include higher percentages of online revenue, greater use of cloud technology, as well as adoption of solutions to improve day-to-day running of a business, including finance, supply chain and employee management technology.
These kinds of cloud-based tools can replace time-consuming and labor-intensive tasks, as well as paper-based systems for small businesses. This ultimately saves time and creates greater efficiencies, giving business owners the space for strategic thinking, which is so crucial during a crisis. It can also free up time to look into customer insights and consult advisors, such as accountants and bookkeepers, before making important business decisions, which is another common factor the research identified amongst thriving businesses.
The power of community and the importance of ecosystem engagement
According to the research, those organizations that have thrived throughout COVID-19 have been better at accepting and taking advantage of support from their governments, partners, and communities – whether that help has come in the form of financial support, discounted or free goods/services, or other special arrangements with partners.
During the height of the crisis, it was apparent just how powerful the support from a community can be firsthand, as tech companies joined forces to support small businesses and each other. For example, Shopify challenged their app partners to solve emerging business problems and start building apps to help businesses adapt, grow and thrive online with their app partner challenge. Unleashed created an online marketplace, giving their small business customers an extra way to encourage online sales, after many found their usual routes to market had disappeared with the onset of lockdowns. And this is just the tip of the iceberg.
Building resilience now
When looking at the characteristics of businesses who have been able to navigate the challenges of the crisis and keep on thriving, there is a common thread through it all: support. The operators of these thriving and more resilient businesses understand the type of support they need and where to get it, whether it’s from technology, their government, communities or advisors.
But an important point to highlight is that the research also found those businesses that were thriving, excelled across all areas even before COVID-19 and have continued their success by getting advice and support from their ecosystems. Even back in 2019 they were more likely to engage and sell to customers on diverse digital channels, use cloud solutions and act diligently in assessing their business processes to improve operations. When COVID-19 struck, while they still may have had to pivot to survive, they had already built the foundations to give their businesses a better chance to stand strong through the storm.
If they aren’t already, small businesses should take the time now to reflect on what kind of added support in the current environment could help bolster revenue, customer success and continued innovation.
Nick Houldsworth is Xero’s Exec GM of Ecosystem.