Opinion: Small Business Outlook
The digital transformation has reshaped how we live and work. Covid has further accelerated the digital trend. Now, as we move forward, ESG initiatives and investing are trending. In business schools, the triple bottom line, corporate social responsibility, and external environment analysis have been encouraged for decades. Accordingly, the argument has always gone back to the Friedman Doctrine and the corporation's sole objective of returning money to shareholders through profits.
Over the next five years, small businesses will be surrounded by extreme uncertainty and volatility, raising the question: how do small businesses survive in this market?
We believe the small business landscape will have constraints and cause some companies to cease operations, but many will capitalize on new opportunities. The same trends we see on a macro level will also hold to the private sector. In particular, the ESG popularity follows consumer preferences to reduce carbon emissions and harm to the planet in general. Thus, companies like Tesla have been climbing for years now. Moreover, the digital transformation has similar attributes to the ESG priorities. As our digital resources, tools, and experiences continue to evolve, the efforts in ESG can also accelerate by demonstrating tangible results. For small businesses, it critical to know your customer base and their preferences.
Simply put, the world has changed. We are a world of distinct and multiple generations, with changing social priorities. Companies that offer products and services for businesses to operate remotely will continue to trend. Companies will continue to work towards being carbon neutral. The UK intends to ban the sale of fossil fuel vehicles by 2030. Yes, we will eventually return to offices, but even that experience will be more digitally-centered, consisting of fewer in-person meetings and traditional business gatherings.
As small businesses, we must think about how our customer's needs have changed and continue to change and deliver to them in a digital, virtual, and environmentally efficient way. There is no secret to growing your sales; expand the reach of your offerings, introduce new products and services to the market, strategic marketing, or a horizontal acquisition. Finding the market's need can be a challenge, but you do not have to reinvent the wheel.
Think about the challenges you are having as a business, think about the problems your customers still face, think about the difficulties you experience personally, and take the world around you to find a problem to solve. The pain points to relieve are around us each day. Moreover, if the ideas are not flowing, then conduct some market research. Reach out to your current customers, reach out to your target customers, and convert this raw data into analytical insights with actionable business recommendations.
Regardless of your company's strategic actions, it is imperative that you manage cash flows, conduct rigorous due diligence, and ensure there is enough liquidity in the company to remain solvent. If your staffing levels are remaining at pre-pandemic levels, then evaluate the performance of your payroll dollars. Small businesses must be lean and consist of collaborative, cross-functional professionals. If you want to provide value to your customers, you must be efficient in your affairs. Internal value is engineered through human, financial, and physical capital or assets. Accordingly, the training programs, organizational structure, standard processes, and communication channels facilitate the internal value.
We anticipate this post has you thinking about your business. Remain objective in the planning and strategic direction of your activities. Keep working on your craft each day!