Businesses of all shapes and sizes have found themselves in an unprecedented situation thanks to the global Coronavirus outbreak.
This potentially deadly virus has devastated every industry, causing serious issues for every business owner.
Some companies have been able to adapt to the situation, but many have been forced to halt their operations temporarily.
While social distancing measures look set to remain in place for some time, the business market will soon begin reopening over the coming weeks and months.
With this in mind, we’ve outlined what the future could look like for small businesses and how you can adapt to the ‘new normal.
As a small business, we had to be innovative. We had to be the speedboat and move fast. If we weren’t pushing the envelope with technology and our influence on the internet, then we’d be having more conversations about needing to find the money for payroll to keep a team of 15 safely employed. Innovation and creativity were a requirement for us.
The larger manufacturing company could simply throw more manpower, money, and resources at any problem that came up due to the economy or changing times. They’re not required to innovate until one of their other large competitors also decides it’s time to innovate.
A Transformational Moment
Running a small business is no easy task, especially given the shifting competitive landscape today.
Long gone are the You’ve Got Mail days when Meg Ryan tried to keep her indie bookstore alive against a Barnes & Noble-style chain owned by Tom Hanks.
Nowadays, local businesses are not only competing against the national chains but also the digital-native startups and D2C brands, flush with VC funding and eager to disrupt consumer-facing categories.
Warby Parker is displacing the local optometrists that have been struggling against the likes of LensCrafters, and Intuit TurboTax is disrupting small tax service and accountancy firms, who already have to compete against big companies like H&R Block.
There is a worthy distinction to be made between conventional small businesses and newcomers that are looking to compete in the same consumer-facing categories.
Most D2C brands and digital-native companies may tick off some boxes on the list of “what constitutes a small business,” such as employee count, revenue size, and market share. However, we’re not categorizing them as small businesses here, for they do not share the same business model or growth objective due to their difference in funding sources.
Pursuing vastly different goals in terms of scale and addressable customers, the newcomers deploy a digital-native go-to-market strategy foreign to most small businesses.
Fostering the Development of High-Growth Companies
High-growth small businesses represent only about 5 percent of total startups, making it important to determine how to spot and foster them.
A key common characteristic is that growth is critically dependent on the entrepreneurs who start these companies; they are people on a mission, charismatic leaders who can inspire creativity and commitment from their staff.
The age of these firms is highly correlated with when their growth is highest. Generally, the most dramatic growth occurs after at least four years of existence—and coincidentally lasts about four years—before it slows again to a more typical pace for small businesses.
Of course, some firms such as Google defy this pattern and continue to experience high growth for many years.
Overall economic conditions
The high degree of uncertainty currently surrounding the economic and financing climate may have prompted many entrepreneurs and would-be entrepreneurs to hold off on growth plans.
Despite their reputation as high-flying risk-takers, good entrepreneurs take only calculated risks, where the benefits outweigh the dangers. Uncertainties about the future trajectory of the economy merely increase risk without raising potential rewards.
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