The one-two punch of a global pandemic and economic downturn hit small businesses hard in 2020. They faced layoffs and closures within weeks of the onset of the pandemic. Of businesses surveyed, 43 percent temporarily closed due to COVID-19. Companies with crisis plans and greater cash reserves launched agile responses to the crisis. Given the lessons learned and persistent uncertainty, here are tips for small business planning for 2021.
Craft a Business Plan
According to a recent Forbes article, only 33 percent of business owners have a formalized plan in place. Start now to finalize your business plan for 2021. Elements include:
- Break down sales and profit goals into annual, quarterly and monthly targets.
- Involve key staff members or a trusted advisor in the planning process.
- Determine any business model changes – will you expand your services? Manufacture new products? Change your geographic territory?
- Plan for unusual circumstances. According to a recent survey conducted by Proceedings of the National Academy of Sciences of the United States of America (PNAS), of small businesses surveyed, the median business with monthly expenses over $10,000 had enough cash on hand to last only two weeks. Companies with larger reserves were more optimistic about surviving a downturn.
- Create a rainy day fund for your business by setting aside a percentage of all income.
- Draft a plan to account for changes to your costs caused by tariffs, fuel increases or wage increases.
E-Commerce is Everything
In the next 5 years, reports estimate that e-commerce will grow to $5 trillion. Retailers are moving from brick and mortar stores to online stores. The shift accelerated in 2020 due to shutdowns caused by the pandemic. Here are some tips to maximize online sales:
- Learn from your customers. Both positive and negative customer reviews give valuable customer feedback. Revise your products and services to improve reviews and increase sales.
- Sell through multiple channels like Amazon and Instagram in addition to your website.
- Include advanced product filtering. Don’t make your customers scroll through 100 widgets in every color when they are only interested in red ones. Add filtering functions to your site so customers can quickly find what they need.
- Offer a variety of payment choices. Having multiple options makes it easier for customers to buy from you and reduces the cart abandonment rate.
- Provide discounted delivery or free shipping.
- Personalize your customer interaction. If it works for your business, use smart personalization engines to suggest products your customer might like based on past purchases. Institute a loyalty program that offers coupons and vouchers to repeat customers.
Face Time with Customers – Upgrade Your Social Media
At any given time, 84 percent of Americans are shopping for something. Ninety percent of consumers begin that process with research on their smartphones.
- A weekly tweet or post is no longer enough.
- For a successful social media campaign, you must know your audience and reach them in the platforms they use. Examine your social media activity to understand where your posts generate the most feedback.
- Use social influencers. To increase visibility, find experts in your area, and have them post reviews or articles about your product in exchange for money or samples.
- Hire a social media specialist or utilize the services of a freelance content marketer.
No one could have predicted this year’s global pandemic and the economic crash that resulted. But businesses that adjusted successfully had a crisis sales recovery plan in place. It’s difficult to respond promptly once a crisis begins, so plan ahead. Look at how industries shifted their business models this year.
- Restaurants created outdoor seating and offered carryout and delivery services.
- Hotels, hit by travel bans, offered discounts to local residents.
- Retail stores expanded their online sales.
- Grocery stores offered delivery and curbside pick-up.
- Manufacturing companies shifted production to coronavirus-related equipment, such as respirators.
- Health clubs created online workouts.
Brainstorm with your team about how you could adjust your business model to respond to a future sales crisis.
Maintain a Healthy Workspace
After the first wave of the pandemic, lockdowns lifted and Americans returned to work and shopping. Yet concerns about the safety and cleanliness of commercial spaces persisted. Give your employees and customers peace of mind by scheduling regular deep cleaning of your facility. This goes beyond normal janitorial services. Companies like SERVPRO offer pathogen cleaning programs based on CDC cleaning and decontamination standards. Communicate your sanitation processes to your customers.
Protect Your Health
Be sure to protect your health with adequate health insurance. If you have one or more employees, you may qualify for small business health insurance. Businesses with fewer than 50 employees are not required to provide coverage. But, as highlighted by Business News Daily, there are benefits to small business health insurance:
- Group coverage might be less expensive and cover more
- You could qualify for a tax credit
- It could help recruit and retain employees
For information on creating a plan for your business or an assessment of whether your plan is the best-priced option for your employees, seek the guidance of an unbiased, licensed health insurance agent.
Prepare Your Sales Pipeline
The new year approaches with the pandemic in full swing, but this time entrepreneurs won’t be caught by surprise. Here are some lessons learned to apply in 2021:
Keep Customers in the Loop
- If circumstances require a change in how you interact with customers, communicate new processes early and send updates as needed.
- Set new expectations with partners, customers and suppliers.
- Don’t be the last among your competition to adapt to market changes
Expect Remote Work to Remain
- Don’t assume that remote work is a temporary fix. Eighty percent of full-time workers expect to work from home part-time after COVID-19 guidelines are lifted.
- Be sure your virtual meeting tools are high quality.
- Consider how to allow your customers to sample your product remotely.
As businesses deal with lasting effects of the pandemic, 2021 promises to be another unconventional year. Remote work, travel restrictions and limitations on meetings remain in place. But having a plan in place and being prepared to respond to a changing marketplace will allow small businesses to survive and even thrive.