The fact that 92% of U.S. small businesses have reinvented themselves during the pandemic says a whole lot about this bunch. Small business owners are scrappy go-getters with no quit in them. And the survey from GetApp proves that very point.
Small Business Reinventing During Pandemic
According to the survey, 92% pivoted their business in at least one way, but many have pivoted in multiple ways. This means only a small minority, or 8% didn’t pivot their business at all to adapt to the current environment.
When these businesses are pivoting, they are changing their business model on the fly. And when they do, they are hitting paydirt. One of the respondents in the survey highlights the need to quickly change a company’s business model.
Sally Matsumae, owner of Asahi Imports, a small Japanese grocery store and delicatessen in Austin, Texas, is such an entrepreneur. Matsumae goes on to say, “With shortened business hours and everyone’s fear of leaving their homes, we had to quickly figure out a way to offer online shopping and curbside services.”
Adding, “With the pandemic, we had to act fast. We had to scramble to get some sort of system that shoppers could use to tell us what items they wanted without having to step into the store.”
So, what are the five business model changes that are helping these companies survive?
The 5 Business Models
These business models are primarily being driven by digital technology. And as the survey reveals, you can use the technology no matter how small your business. The key is to adapt to the changing conditions and implement the solutions to better serve your customers.
Online Delivery Channel
Many small businesses have been thinking about launching online delivery. But before the pandemic, it wasn’t absolutely essential. This is what Matsumae also says regarding this very issue. “I’ve always wanted to have an online store, but unfortunately it was always one of those things on the to-do list.”
In the case of Matsumae, the business added an online inventory to its website along with an embedded Google Form.
According to GetApp, “Ultimately, what matters most is getting your business online—how you do it is less important.” So, look at all your options and find out the best solution for your business, customers and location. An online marketplace that lets your customers buy or order online is a must during the pandemic and beyond.
Virtual Service
Whether you are a music teacher, personal trainer, or chef, you can create virtual services to supplement your income.
In the survey two out of five small businesses are creating a new virtual service. This not only lets you keep your local customers, but you can also find new ones around the world.
Offline Delivery Channel
While an online delivery channel will keep your customers engaged, don’t forget about offline delivery. Curbside pickup and home delivery is another way to keep your business going.
If your business can’t afford its own delivery service at the moment, consider services such as Uber Eats. As the report points out, make sure to look into the cost of these services. With profit margins so low, the cost might not be worth the benefits.
On the other hand, even with razor-thin margins it can be a great way to build your customer base. And when social distancing is over, they will remember to come to your business in person.
Design a New Product
Designing a new product may not be possible for many businesses, but for those that can, it is another opportunity. Manufacturers can pivot their production to address a need in this market. Whether it is masks, sanitizers, or other PPEs, there is an opportunity.
By reconfiguring your resources to address a new need, you can keep your business going until things pick up.
Target New Customers
Targeting new customers is always a goal for any business. However, in this particular scenario finding new customers that want to buy your products is especially important. This is because businesses across the board are losing a percentage of their customer base.
While you are looking for new customers, don’t forget to try even harder to keep your existing customers. Cashflow is a big problem for small businesses, so keep that in mind as you try to find new customers.
Challenges of Pivoting
GetApp says businesses that are pivoting are three times more likely to report higher revenue. Fifty-one percent say they have increased against their forecast because of the pivots. It goes all the way down to 16% for businesses that didn’t pivot.
This, however, doesn’t mean there are not any challenges. The top challenges are lack of skills for the new approach (22%), shortage of funds (16%), and setting up new online delivery channels (14%).
When you see your business environment changing, taking action is key. Waiting for things to get better might work, but you are not in control. By pivoting to fully address the challenges head-on will keep your business going and point out new opportunities.
Image: Depositphotos.com
This article, "92% of US Small Businesses Have “Reinvented” Themselves During Pandemic" was first published on Small Business Trends
July 26, 2020 at 09:01AM
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Michael Guta, Khareem Sudlow
