We’re not going to sugar-coat the issue. Things are really tough for small to medium enterprises (SMEs) right now.
Covid-19 has been a major blow, with lockdowns that shuttered businesses and employees who are still nervous about coming in to work. Not every business can successfully pivot to operating online only, and even for those that can, internet transactions don’t always make up for all their lost offline and in-person sales.
On top of all that, the economy is contracting. Consumer expenditure is dropping as disposable income falls, with consumers cutting spending and leaving little profit for small businesses.
The impact on SMEs is evident. Approximately 234,000 small businesses in the UK closed between March and September, and those that reopened after the first lockdown reported that their revenues declined by 80%. In London alone, 76,300 SMEs closed permanently in the first half of 2020, and even those that are still open have well-founded fears for their future. 20% of small business owners estimate that their companies will fail within three months, and another 10% place their survival at six months. About 17% say they wouldn’t survive another lockdown.
And yet, two-thirds of business owners are optimistic about their future.
Join them in aiming higher than merely surviving the difficult days of Covid-19 and hoping that success will find you again one day. When it comes to business, there’s no use waiting for a fairy-tale prince to rescue you. You have to make your own happy ending with the right mindset, tools and strategies.
Change your mindset
The first step is to think positive. “Aim for the moon, even if you miss, you’ll fall among the stars,” as the saying goes. If your biggest goal is to stick it out, you’re not likely to see much of an improvement in your business.
With your positive mindset, take a critical look at what you do have the power to improve in your business. This includes efficiencies, like cutting costs, but also a high-level assessment of your business structure. Many SME owners are so mired in the daily grind of running the business, they lose sight of strategy.
Seize the moment to rethink your business proposition and look for ways that you can make it more relevant for today’s remote-work, remote-social society. Refresh your operating models to make them stronger and more effective at driving revenue.
However, in the world of business, you usually need funds to plan for the big time. Seek out small business funding (including small business grants) that reaches beyond simply covering your basic costs. Secure the capital you need to fuel bolder plans for your business’ future so that you can plan big and aim high.
Focus on customer retention
As much as you want to attract new customers, it’s not easy in the current climate. Turn your attention to retaining existing customers, who have a higher LTV than newly-acquired buyers.
Your current customers already value your business and they want to support you, they’re just strapped for cash at the moment. You need to make them an offer that hits that sweet spot between their desire for your services and their need to protect their wallet.
One of the easiest ways to do this is by using vcita Packages to create customised offers that are integrated into your business website and speak to each consumer’s real needs.
For example, if you offer beauty services, you can segment customers into different groups according to their past purchases to send personalised discounts, like inviting one set of customers to enjoy 15% off when they prebook a set of eight manicure appointments, and sending another set a discount when they book a facial and threading bundle.
The platform guides you to smoothly create targeted emails and enable one-click checkout for multi-buy transactions.
Work the mood
Covid-19 led people to feel a new appreciation for local small businesses. They want to support their local community and avoid global corporations with stretched-out supply chains. Take advantage of this attitude by emphasising all the ways you’ve contributed locally throughout the years.
If you can, extend support to the community right now as well, by donating products, services, or your time. For example, many small businesses pivoted to produce masks or hand sanitiser at cost prices. Consumers are more concerned than ever to support businesses that match their values, praising companies that are generous towards their employers and their local area, and advising people to stop shopping at those that are selfish and stingy.
An estimated 86% of consumers in Europe, the Middle East and Africa say they’re likely to stop buying from a brand due to its pandemic response (or lack thereof).
Give, and get, good feeling
Even when stuck at home, people still want content that is positive, entertaining, and gives them hope for the future, so don’t let your social media and email marketing falter.
Express empathy, but don’t get stuck in the negative. Consumers have had more than enough of it, especially younger consumers who want more uplifting, exciting and funny ads.
Above all else, produce content that is human. Consumers are 1.7 times more likely to buy from brands that forge a human connection, and SMEs already have an advantage here over big corporations. You have genuine connections with your customers and a human story to tell, while corporate giants have to work hard to achieve the same impression.
Content that entertains and engages consumers will repay you over the next year and beyond, so focus on building lasting relationships, not driving short-term transactions. If you give good feeling today, you’ll get it back in the form of wider shares for your posts, positive reviews, and user recommendations.
Don’t settle for simple ‘survival’
As we approach the end of 2020, SMEs should set themselves free to achieve all that they dream of. Don’t trammel yourself with limiting plans to do no more than make it through COVID-19. Instead, plan to expand and succeed. By thinking big, focusing on retention, working the mood, and generating a positive feeling, you’ll position your business to thrive and grow in 2021 and beyond.