How COVID-19 Will Influence the Way forward for Small Enterprise
Covid-19 is widespread across the country and the number of cases is increasing rapidly. Fear of pandemics is growing and small businesses are feeling the pressure. According to a new Xero report, Emotional Metrics: Small Business Mindsets During the Pandemic, two-thirds of small business owners said they were concerned about the mental health and well-being of themselves and their employees.
The report reveals the mental health roller coaster we’ve ridden year-round as the coronavirus swayed between runaway peaks and retreat.
How do small businesses deal with this? I spoke to Ben Richmond, US Country Manager at Xero, to learn more about the report and the information it contains about the future of small businesses.
Rieva Lesonsky: The pandemic is lasting longer than most of us initially expected. How do you see the impact on small business owners?
Ben Richmond: The indefinite and uncertain nature of the pandemic has created its own type of stress and it is more important than ever that we ask how people are doing, listen and take action in this atypical situation.
Lesonsky: When asked about their biggest concerns, small business owners in the study rated the mental health and wellbeing of their employees fifth and sixth out of six, although I suspect this is more bothering their thoughts than they admit. How can companies and small business lawyers and mentors help them through these troubled times?
Richmond: The crisis has revealed a fundamental difference between large and small businesses – small businesses are more personal. There are no degrees of separation. The decisions are devastatingly difficult as there is a face and a family associated with every decision about employment, compensation, and whether or not the business can go on. However, it is difficult for small business owners to put their hands in the air and ask for help.
In our recent survey of issues and attitudes directly related to the health crisis, nearly 40% said they had never consulted an outside advisor for advice on financial issues related to the virus. Now is the time for small business lawyers, mentors, and consultants to reach out to businesses and show them how they can help.
In order for employees to thrive, they sometimes need to take time out when they feel stressed or overwhelmed. Last year we repositioned our sick leave as a “feel good vacation” to recognize that people’s wellbeing can be physical, mental, spiritual or emotional. We want our employees to feel comfortable when they take vacation for whatever reason. And right now, given the uncertainties of the pandemic, we’ve seen the importance of taking time out to attend to your own needs.
Lesonsky: The study showed that some small business owners were looking for “alternative growth opportunities”. Can you give some examples of how they spin?
Richmond: According to another study, The Next Chapter for Small Business, conducted by Forrester Consulting on behalf of Xero, there are six consistent themes [shared by] Companies That Thrived During The Pandemic:
- Offers a range of products and services. Successful companies are most likely to have expanded their offerings of products and services during Covid-19, and are likely to continue to do so.
- Customer loyalty strategy. These companies are more likely to have engaged with their customers through various digital channels and developed customer acquisition and retention strategies, including customer loyalty tools.
- Operations. They were more likely to implement solutions to improve their finances, supply chain, and employee management.
- Technology introduction. They also showed a higher percentage of online sales as well as cloud adoption.
- Ecosystem engagement. These companies have been able to better capitalize on help from governments, partners and communities and understand the ecosystems in which their companies exist, the parties involved, and where to get help.
- Decision maker. They are more likely to check customer insights and consult with advisors such as accountants and bookkeepers before taking any important business move.
One of our clients, Museum Hack, based in New York, ran small group tours to museums and raised income from public ticket sales, private tours, team building tours, and museum consulting. With their personal tours suspended due to the pandemic, they have gone virtual and have focused on virtual corporate team building events. They have more than doubled their previous monthly income. The company now offers unique virtual experiences like events like “Tiny Campfire” where kits are sent to company employees and everyone is brought together for a video call with camp games and ghost stories.
Other items from AllBusiness.com:
Lesonsky: The report found that most business owners did not find the Paycheck Protection Program (PPP) very successful. They say they need help with cash flow.
Richmond: Cash flow is the lifeline of any business. In the face of economic uncertainty, maintaining healthy cash flow can make all the difference to a company’s survival. To maintain healthy cash flow, we recommend small businesses to work with a trusted advisor. Small businesses are used to a “do-it-yourself” mentality, but taking a “do-it-together” approach by working with a consultant can help them gain a competitive advantage.
Lesonsky: What’s next? How will small businesses fare in 2021?
Richmond: History has shown that after downturns there is a revival of business, coupled with incredible feats of creativity and ingenuity.
Given the speed at which technology adoption is advancing during the pandemic, I believe 2020 will become 2025. There’s no better time now for businesses to get online and to the cloud. In the early days of the pandemic, companies took steps to work remotely and set themselves up with the right collaboration tools. While there are many unknowns as to when the pandemic will end, entrepreneurs now need to move from surviving to thriving so they can accelerate growth.
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