How Can Small Businesses Survive This Era
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How Can Small Businesses Survive This Era
The disruption caused by the spread of COVID-19 is having a major effect on small businesses globally. Goldman Sachs survey (2020) shows that of 10,000 small businesses, 96% have been impacted. According to data on the impact of the pandemic on small and medium enterprises suggest that from the deteriorating economy will be worse for the small businesses and their employees before it gets better. To overcome this, how can small businesses survive in this period?
In this pandemic period, what can make small business entrepreneurs survive and succeed is to have a keen eye on customer demands and desires. This perspective is very important in these times as things have drastically changed, existing business models are destroyed and new opportunities are being created. Instead of just lamenting about a decrease in profits, customers, and employees it is time for these businesses to be resilient and have a mindset of identifying new opportunities. (Liguori & Pittz, 2020).
Small businesses should find solace on the internet. The internet has created a platform with a democratized marketplace and has numerous avenues of interacting with customers. The online business platform also provides an opportunity to identify product-market fit and look for new business models that can survive and thrive in this COVID-19 impacted world (Liguori et al. 2020). If the small businesses utilize this resource they will be able to mitigate the risks by identifying new customers and opportunities and eventually grow. Those entrepreneurs who will take advantage of this time to connect and create strong relations with customers, and improve their skills will emerge stronger than ever before after the pandemic.
In this time of the pandemic, small businesses should ensure they keep communicating with their customers to build trust. They should utilize their website and social media platforms to communicate changes in business operations such as opening and closing hours or major inventory changes. For regular customers and those that account for major revenues, they should consider reaching to them personally to maintain the relationship. As much as there is a need to maintain sales and revenues, this pandemic is a chance to deepen connections with customers. Business owners can achieve this by helping them with their human and business needs where possible.
In addition to connecting and meeting the needs of customers, business owners should also consider their employees. In times like this business owners are required to be strong leaders and be transparent, accountable, and over-communicate (Liguori et al. 2020). To be transparent means, they should let their employees how the business is in terms of revenues and business models. Whereas many business owners keep such information confidential, sharing helps the employees understand the business models, build trust and they create value in the long-run. Accountability means that in case of lay off, the owners take the responsibility and shield the intermediaries such as managers from blame. Over communicating is where the owner talks more with the employees as most of them are not used to uncertainty and this assures them.
Another way that small businesses can survive is by maintaining a connection with their entrepreneurial ecosystem. Having a positive culture within an entrepreneurship ecosystem helps stimulate high levels of creativity and innovation. Business owners who have industry connections have the benefit of learning from what others are doing for example, what strategies they have used to expand, diversify, or save revenue. They can also get new ideas, critical financing and inspiration, and resilience. Since entrepreneurs everywhere are feeling the pressure, connecting help share best practices, empathize, and even commiserate to have stronger ventures.
A crumbling economy does not really mean that small businesses have to be swept out. In fact, they can also grow if when the economy is taking a downward turn if they make strategies that help them to stand out from their competitors. These can be achieved through several measures. One is keeping costs down. Small businesses can reduce their costs and maintain competitive prices without having to reduce the quality of goods or services they offer. This will help to remain competitive in the industry. The second strategy is to differentiate its products/services. Small businesses should be flexible to give new and different products to their customers with the change and shifts in demand. The third strategy is about customization. Small businesses should work closely with their customers so to identify and produce tailored products/services according to their customers’ needs. (Bartik, Bertrand, Cullen, Glaeser, Luca, Stanton, 2020).
Small business owners need to be nimble. In this period of COVID, there have been many turns and twists in the business sector. Business owners, therefore, need to be fast to change with the changing times by recalibrating and redrafting business strategy to adapt to change. An example is Sheppard of Bow & Arrow Brewing Co. in Albuquerque, New Mexico whose business was at a critical point and difficult to pivot. Before COVID 19 most of the revenue came from customers visiting the taproom. At first, it could only provide to-go products but has since opened up its outdoor patio at 50% capacity, according to the public health regulations. The company has purchased a new canning line, designed new labels, and released its first two brands of canned beer. The owner says that they are selling so much and are working to meet the high demand for canned products. This shows the importance of a business being flexible with changing demands. (Fairlie, 2020)
A healthy business requires a healthy leader. In times of difficulty like the COVID 19, period business owners also need to take care of their mental health. These times can bring with it so much stress and anxiety. Business owners should consider seeking help from professionals when they realize they have symptoms of stress and anxiety. This will help them be in a possible to make proper decisions as tough choices are made at such time.
Small businesses can survive in this pandemic that has affected the economy of the whole world. The success or failure of these businesses depends on how owners take the initiative to survive this period. From the articles, it is evident that business owners should maintain a connection with their customers, utilize the internet, be flexible with market trends, connect with other entrepreneurs, and above all check their mental health. If these strategies are well applied the small businesses will survive and emerge better even after the pandemic.
References
Bartik, A. W., Bertrand, M., Cullen, Z. B., Glaeser, E. L., Luca, M., & Stanton, C. T. (2020). How are small businesses adjusting to covid-19? early evidence from a survey (No. w26989). National Bureau of Economic Research.
Liguori, E. W., & Pittz, T. G. (2020). Strategies for small business: Surviving and thriving in the era of COVID-19. Journal of the International Council for Small Business, 1(2), 106-110.
Fairlie, R. W. (2020). The impact of Covid-19 on small business owners: Evidence of early-stage losses from the April 2020 current population survey (No. w27309). National Bureau of Economic Research.
Fairlie, R. W. (2020). The impact of COVID-19 on small business owners: Continued losses and the partial rebound in May 2020. NBER working paper, (w27462).
