The year 2021: Sage’s twelve (12) tips to help small businesses survive an uncertain economy
The year 2020 was a turning point for the global economy. Two key habits were transformed by the pandemic. The way people work and the way people relate with one another. Since work and relationship are at the heart of career, business and financial progression, the transformation in those areas demand that efforts be made to tweak personal and corporate processes and investment machinery to stay relevant in the New Year.
It is hardly going to be business-as-usual. Internal value-chain restructuring, portfolio diversification and improved digitisation of business processes, and up-skilling among the working population would be critical for all segments to stay economically relevant in the year 2021.
Since whatever happens to the economy ends up affecting the population which later affects the bottomline of all businesses, all organisations would have to project unavoidable externalities into their outlook for the year 2021.
Here are twelve (12) tips Sage, a business software firm, advised small businesses to embrace to thrive:
#1: Rank customers on key attributes
You may know your best customers by name, especially if you are a small business with few customers or sell mainly to businesses rather than the general public. If you can, rank these customers on one attribute (let’s say “spend the most”), then generate a list so you can contact them for reorders.
Another way to maximize past customers is to find out if there are specific products that they tend to buy more, then build products related to those that your customer may find interested in. If you use accounting software, then it’s easy to sort all your customers and their purchases quickly.
#2: Nurture your brand advocates
Happy, loyal customers will spread the news to their friends. They will post about you on social media, which is free advertising. People trust their friends’ opinions over a company’s marketing efforts.
If you have customers like these, make sure you comment on the reviews and raves they leave for you on Google, Yelp, or other social channels. This is a small gesture that will show them how much their business means to you.
Another way to show appreciation to your loyal customers is to offer them a referral incentive. For example, if they refer a friend to your business, you can offer them both a referral discount on their next purchase.
#3: Adopt agility as part of your small business culture
If there’s anything 2020 has taught us, it’s to prepare for anything. For small business owners, this means having to roll with the punches. While many larger organizations adopted a work from home standard, some businesses require physical labour or on-site staff. These businesses should communicate their plans to open safely with their staff, perhaps how they will reopen in waves, or with physical changes to work stations. Prepare for worst-case scenarios, revisit your business plan, and have a “what if” forecast, where all scenarios are accounted for in your cash flow.
Agility also means adopting practices that make your business more efficient. Tools like Robotic Process Automation (RPA) can free up management from routine, time-consuming tasks. Evaluate processes where automation can save you time, invest in these as they will continue to serve you long after the pandemic ends.
#4: Use targeted social media advertising
Facebook advertising offers look-alike audience targeting. Using your existing customer database, Facebook looks through its database and finds people who match the profile of your existing customers. You can then create ads that are targeted at this look-alike audience.
As another plus, Facebook ads are seamlessly converted to Instagram ads within the Facebook Ads Manager. When done right, Instagram can be a huge platform to grow and sell.
Targeting is the number-one benefit of using social media because when you are setting up your ads, you can request criteria such as education, financial status, ethnic affinity, location, and life events.
You may get fewer people seeing your ad when you narrow your criteria, but lower numbers are outweighed by the benefits of reaching more of the people you most want to learn about your business.
Make sure you set up tracking pixels for retargeting ads. These ads will show your products to those who have already visited your website, making it a seamless way to remarket your business to your audience.
Don’t have the funds to advertise on social? Running a giveaway contest is an easy way to increase your engagement and followers for a relatively low cost.
#5: Diversify the markets you serve
If your traditional market is struggling, can you try other markets? For example, you might find success in the next town or by changing your marketing focus. If your market is too broad (for example, people living within a one-hour drive), it may be better to narrow it to “female accountants who own condos in the downtown core.” You may discover a new market.
#6: Automate business processes that are eating up your time
If you’re still juggling to keep up with paper receipts each month, it might be time to get a receipt app. This will lighten your load when it comes to reconciling expenses because the app can automate the process for you. Another added benefit is the reduction of human error. When you can simply scan receipts the moment you receive them, you no longer have to worry about losing them or making mistakes when you input them into your accounting system.
#7: Lean on your accountant for financial confidentiality and support
Maintain confidentiality as you seek financing solutions and lean on your trusted accountant. You may not want your employees, customers, and suppliers knowing that your business may need an injection of cash because it could affect confidence, morale, or overall performance.
Accountants have been on the financial frontlines of getting small businesses through the trials and tribulations of 2020. As more upcoming legislation can affect the options of riding out the end of the pandemic, small businesses should have their accountants on speed dial as they can make headways of what can be often confusing applications and seemingly never-ending updates to legislative stipulations.
#8: Set up subscription-paid services
If your business model allows for it, can you set up recurring subscription-based services for your customers? For an incentive for them to sign up, is there a marginal discount you can offer them these recurring purchases?
Subscription services or goods make it easier for both the customer and for you. For the customer, it is a pain-free way to get their goods on a regular cycle, without having to waste time on your billing page. For you, it can mean a consistent, regular stream of cash flow.
By providing your customers with a variety of payment options, your small business will remain competitive and attractive to clients.
#9: Ask for feedback
Don’t be afraid to ask your staff or even friends and family questions on what they think the business could do better. Often employees are instinctively aware of issues (and solutions) in the business, while those with an outside perspective can share ideas that you may not have thought of previously.
#10: Be better than the competition
It’s much easier to be competitive if you solve a customer’s problem better than the competition. Focus on the benefits you provide, not the features. If you were selling electric drills, it’s not the drill you are selling – it’s the hole.
2021 promises to be a year to rebuild. Ask yourself how that affects your customers? How can your business help them better, in a new normal? If you can offer your clients more value than the competition, you’ll thrive in the New Year.
#11: Don’t charge less, offer more
Lowering your price in order to compete is a losing proposition – especially against larger competitors with deeper pockets. Instead, beat them using superior service, product mix, product knowledge, or post-sale support.
There are smart people out there ready to support you. Be open to listening to others and accepting their advice.