Businesses globally had to endure the external pressures brought upon by the pandemic. In the past two years, massive changes have disrupted the supply chains. Despite the easing of restrictions, uncertainty continues to lurk around. So the evolving market and the tighter competition are challenges they must overcome.
Small businesses are more vulnerable to risks, as the rebound is not absolute yet. Should borders close again, those with brick-and-mortar stores may face another problem. Fortunately, many have already adapted to the new normal and found opportunities. This article will provide some business tips to stay afloat in the stormy market environment.
Watch Out for Industry Trends
As a business owner, you aim to be distinct and phenomenal. You are bound to create something that will help you get ahead of the competition. But, in these turbulent times, it will not hurt to mind your peers’ businesses. You must observe the trends while keeping the uniqueness of your products and services.
You may start with how they market their products. As more people go online, you must also use social media and search engines to increase your visibility. Your page and website may strongly influence customer perception. You may also apply their best strategies or mix them with yours.
Take Advantage of Technology
Digital transformation is also an integral industry trend you must understand and utilize. Increasing your online presence is already a giant leap. But it does not end with online marketing and website creation only.
It may even help with your day-to-day transactions. The technology works best if you are managing your business remotely. You can watch things closely with field service management software while at home.
You can check if the products are safely stored and delivered. You may create backup plans if something wrong happens in the field. Likewise, it serves as workflow management software, which optimizes business processes. Recent statistics show this tool increases customer retention by 42 percent.
Technology also applies to your financial transactions. Doing online transactions is better than digging into piles of invoices. It increases efficiency and manages errors as tracking payments and orders becomes easier.
You may use digital wallets and business accounts to transact with your suppliers. Your customers will love you better, as cashless transactions become more prevalent. In the US, customers prefer cashless payments, whether in-store or online payments. Today, 82 percent of Americans are inclined to use digital payments. These include mobile phones, QR codes, virtual credit cards, and contactless cards.
Beware of Macroeconomic Changes
Macroeconomic changes are the strongest external pressures in the new normal. Policymakers and business owners must be careful, since economic recovery is not absolute yet. The rising inflation rate has become more evident since the fourth quarter of 2021. Today, only one of the G20 countries does not see an increase in the inflation rate.
It will also increase your costs and expenses. You may pass the burden to your customers, but that may hurt their purchasing power. In the end, it may affect your profitability. You have to improve your asset management and production to maintain efficiency. Doing so will help increase revenues while keeping costs and expenses manageable.
You also have to be more careful if you have unpaid loans. The Fed anticipates interest rate hikes to stabilize inflation. The contractionary monetary policy aims to encourage savings and discourage borrowings. So you may have to pay your loans to avoid higher interest rates. Nevertheless, these are still transitory due to pent-up demand for products and services.
Maintain Solid and Intact Fundamentals
Amidst the economic and market changes, you must ensure your adequacy to sustain your business. Your financial health must always be sound and intact. You have to assess all your products and services and identify which has the most and least demand. That way, you will know what and how much to produce. It helps you maximize your revenues and manage costs and expenses better. It will help you have economies of scale in the future. The expansion will also be possible for more growth prospects.
But you should not only focus on your revenue and expenses. Look into your assets to know if you have the means to sustain your operations and expansion. Do you have plenty of cash? If not, you may have to increase your financial leverage or sell your non-performing assets. Are fixed assets and inventories adequate to meet market expectations? Check how much and how quickly your assets are translated into cash. You can use several ratios to measure your profitability and sustainability. Current Ratio and Return on Asset are some typical indicators regardless of the business size.
Take Care of Your Employees
The challenge of The Great Resignation does not show indications of slowing down anytime soon. Recent statistics show that 4.30 million employees in the US quit their jobs earlier this year. Today, 44 percent of employees are looking for new job opportunities. Sure, you don’t want the same thing to happen to your business.
A raise may not be easy for small business owners like you. The least you can do is make your workers feel safe and valued. Try to lend them your ears and let them voice their concerns and opinions. Doing so may help strengthen rapport and camaraderie. You may get suggestions to improve your business processes and maximize opportunities.
Recent statistics show that 69 percent of employees work harder if appreciated. It will lead to better employee retention, lower labor costs, and enhanced productivity. Given this, your revenues and income may also increase. Remember that hiring and training new employees is more tiring and expensive.
You Can Weather the Stormy Market Environment
Running a small business amidst the still challenging market landscape is not an easy-peasy task. But, there are more opportunities, given the pent-up demand across different industries. You have to be careful to keep up with the changes. So following these tips may help you endure the external pressures and compete even with larger peers.