Last year saw breath-taking changes to the small business landscape. Businesses have ceased trading overnight; businesses have gone through desperately difficult times and found a way through;
Last year saw breath-taking changes to the small business landscape. Businesses have ceased trading overnight; businesses have gone through desperately difficult times and found a way through; and some businesses have even started or grown in the crisis, realising new opportunities through the gloom.
Many businesses have come into 2021 with significant hurdles ahead of them, unsure how lockdown 3 will impact them.
The question I’ve been asking myself, is this: are there common actions, circumstances or characteristics that make a business more likely to be resilient to significant shocks such as Covid-19? Is this separate to sector? Is this apart from age and location?
Working with TSB, Small Business Britain set out to research and explore this through a report on ‘How To Be Resilient’. We found there are similar themes, actions and approaches that have worked for small firms across the spectrum, which can provide vital inspiration and support to other businesses as they take their next steps forwards.
This is not just about tackling Covid-19, but a guide in “How To” make the best of any bad situation, based on the expertise and experience of successful small businesses.
There is of course no magic “one size fits all” solution to the many difficulties facing small businesses. They will have been impacted in wildly different ways depending on their individual circumstances, cash reserves and situation going into the pandemic, existing digital skills and of course their location, sector and size.
However, our research identified some interesting common characteristics. In particular, embracing digital, diversifying products and services and accessing emergency finance were found to be the top ways small firms have survived the Covid-19 crisis so far.
Government support has been critical. Over half (53%) of small firms accessed emergency government financial help to survive, with a third of firms citing Bounce Bank Loans as a major lifeline enabling them to continue.
Digital and diversification
Digital has also proven to be massive tool for survival, as well as future growth. Half of businesses we spoke to said they got through by introducing new technology. This not only aided business operations, but also boosted confidence - over 70 per cent of business owners felt these digital changes would enhance their business over the longer-term.
Importantly, digital is not just one tool. There are many ways that a small business can make the most of digital to maximise their opportunities and find ways to thrive in a difficult climate. Digital can be about marketing and sales. It can be about saving costs, doing things such as online accounting, video calls rather than travel, searching for lower cost options for all sorts of business processes. Digital can also be about productivity, about doing what the business does, but in a more efficient way, allowing time and money to be spent on growth.
Furthermore, a huge leaver for ensuring financial survival was working on the top line: 44% of businesses brought in new revenue streams. The pivoting of the business to allow for new opportunities to bring in cashflow was a critical route, and one supported significantly by digital.
Tools and Techniques
These insights provide a roadmap of sorts for small businesses to navigate the difficult path ahead. Because, however hard it is, the last year has shown there is much that can be done, even in the bleakest of situations.
There is a continued need to adapt and reassess, and there is no time to be lost in putting in place plans for greater resilience.
Look for what is possible, regardless of tiers or lockdowns; look for what can continue despite Brexit or virus mutations; look for more than one way forward as now is not the time to narrow focus. It is the time to get and create more options for yourself. These might be in alternative cost models, new products or services They will definitely include digital skills in one way or another.
Focus forensically on finances. Being able to move and flex costs quickly is really important, as well as making difficult decisions rapidly.
Finally, do not to try and navigate this on your own. Searching out a support team is vital. As well as financial professionals, this could also consist of staff, friends, family, and should definitely include informal mentors and peers in the small business community. There is much support available across the UK and online, and much of it free.
The Way Ahead
2020 certainly taught us that there is no way to predict all the things that could possibly happen. But it also taught us ways to adapt that can help us get through the challenges.
Not everything will work for everyone. Not every business can survive. But taking steps now, taking the insight from businesses who have adapted to keep going, can make the difference between failure and being able to start looking at building back through 2021.