5 min read
This story originally appeared on NerdWallet
The onset of the COVID-19 pandemic was disruptive for many small businesses. However, there are insights that can be drawn from this experience — and these could help your business survive the next challenge or capitalize on an unexpected opportunity.
Business agility is vital. Small businesses that can quickly make adjustments to daily operations, the ways products and services are sold and how funding is secured have an advantage during positive and negative economic conditions. How can a business increase agility? It begins with automation.
1. Automate key business functions
Marketing, point-of-sale, accounting, payroll, human resources and other business functions can be automated through apps and other digital platforms. This automation can allow a business to explore additional sales opportunities, retain existing customers or even pivot to a new business model. Cloud-based systems can give a business the flexibility to quickly move its workforce from an office location to another setting, if necessary.
2. Develop e-commerce sales
E-commerce, the buying and selling of goods and services over the internet, is nothing new. However, the pandemic has amplified its importance. Retail e-commerce sales in the first quarter of 2021 increased 39.1% from the first quarter of 2020 and accounted for 13.6% of total retail sales in the first quarter of 2021 per estimates from the Census Bureau of the Department of Commerce. E-commerce sales can supplement your revenue and also diversify your customer base.
A well-developed website where customers can shop and purchase products allows a business to quickly adjust when in-person sales aren’t possible.
“Unless you have a website, you are not in business,” says Deepak R. Vora, a volunteer at SCORE, a small-business mentorship organization. Vora adds that a website must also be compatible with mobile devices.
3. Offer multiple payment methods
Offering multiple payment options allows a business to retain customers who have changed the way they pay for products and services. In a survey, 54% of U.S. consumers said they would switch to a new business that installed contactless payment options, according to a 2020 study by Visa. An automated point-of-sale system can expand payment options to include contactless payments, credit cards and mobile wallet payments.
4. Explore alternate product delivery options
Over the past year, small businesses have developed new ways to deliver their products to customers when in-person sales weren’t available. Curbside pickup options are now offered by many businesses. Restaurants have turned to delivery services such as DoorDash, Grubhub, Uber Eats and Postmates. And businesses that had previously offered in-person training and classes moved online to deliver their services.
Before the pandemic, Dr. Mani Kukreja was building her integrative health practice, LivAgeWell, through educational workshops and client meetings. When in-person meetings were no longer possible, she thought, “What if I could do something for a broader community, for a bigger audience?” Kukreja created a 21-day immunity course that can be downloaded from her website. The course saw great success, and Kukreja is now planning to move forward with a book on the same topic.
5. Expand supply chain networks
A local disaster or larger national event can make it difficult for a business to get the supplies it needs. Nearly 3 out of 4, or 72%, of U.S. businesses surveyed in early 2020 by the Institute for Supply Management reported supply chain disruptions resulting from the COVID-19 pandemic. To minimize the impact, a business can develop relationships with multiple suppliers, preferably in different geographical locations. Not only does this provide healthy competition, but it also can allow a business to move to a backup supplier when necessary.
6. Prepare in advance for rainy-day funding
Quick access to business loans and emergency funding can help your company survive a crisis. Although loan program requirements vary, business owners who focus on the following may be able to speed up the application process:
Lenders commonly use federal tax forms to determine eligibility for loans. IRS Forms 1040 and 1065, for example, were used to establish eligibility for the federal Paycheck Protection Program and to calculate maximum loan amounts. Filing tax returns on time can help a business avoid delays when tax information is needed during the loan application process.
Although a minimum credit score wasn’t needed for a PPP loan, many other business loans do require one, including bank loans. Maintaining a good credit score (typically between 690-719 FICO) and addressing issues immediately can help a small business avoid funding delays at a time of crisis.
Current copies of tax forms, profit and loss statements, payroll records, contracts, licenses, insurance policies and other important documents are often required during the loan process. Digital copies in cloud storage apps are easy to access and also protected from fire, flood and other disasters.