What’s Ahead for Small Businesses in Canada
Over 8.3 million Canadians work for a small business, it’s about 70% of the national workforce. We mostly hear about the large companies on the news but over 1.1 million small businesses are directly supporting the growth of our economy. Unfortunately, small businesses are in a constant battle to survive from multiple factors such as unfair competition from American multinationals, economic crisis or a natural disaster.
According to Industry Canada, only about 50% of small businesses will survive for more than 10 years. There is an obvious correlation between the crises we face and the companies’ failures. However, even though we are all aware of these facts, small businesses do not prepare themselves for the next unexpected crisis.
Unexpected crises, it’s meant to be unexpected. Companies were planning for the next market crash or the terrorist attack but, this time around, after more than 100 years, a pandemic put the world on pause…
Despite the struggle small businesses face, we hope the pause was an opportunity to rethink the usual way of doing things to modern methods, conscious of sustainability. While small businesses gradually resume their operations, there are few key concepts to keep in mind to rebuild a strong business.
Digital experiences will triumph the new ‘normal’
The normal we know of was pre-COVID, and it is highly unlikely that we will get back to that ‘normal’ once the pandemic is over. The pause in business activity and the shift to online have changed the way we work and how customers perceive products and services. Therefore, businesses must adopt new marketing and sales strategies for this new normal.
When devising these marketing and sales strategies, a good place to start is knowing your customer. With record unemployment and many Canadians worried about their finances, almost all of your customers’ lives are changing with every passing day. Customer insights data is an essential element to gauge this behaviour. More importantly, marketers and salespersons must realize that it is imperative to review the most recent data. In many cases, data older than a month is already obsolete. A publication from Gartner advises CMOs must monitor customer channels for unexpected and quick changes to customer behaviour and purchasing needs.
Businesses must acknowledge and respond to the fact that the digital world is here to stay. People have found more efficient ways of doing things at the comfort of their couch and without any compromises. Be it grocery shopping, contract signing, meetings or interviews, customers have found solutions to save time and they will continue to expect these services online in the post-pandemic world. With businesses fighting for a top spot in listings, Search Engine Optimization (SEO) and Web Analytics will need improvements. For small and medium businesses, who mostly rely on external tools/services for these, it will be important to choose the most suitable tools.
Optimize your expenses and explore new revenue and funding sources
With the world under lockdown from the last few months, the financial burden has been huge on most of the businesses. As the lockdown is easing up, and revenues have started to flow in, small business owners would have to make some hard decisions to survive these tough times.
To begin with, have a realistic estimate of your cash flow both during and after the pandemic. Identify the components of your fixed and variable expenses, which can be reduced. Sometimes it makes sense to slash the flexible expense early on so that you have enough cash flow to meet your fixed expense. It might help to figure out which expenses can be delayed in the current scenario. For instance, negotiate with your landlord to postpone the rent payment, delay the renovation you were planning to undertake, etc.
Additionally, digital has become a big part of doing business in the current scenario and is most likely to stay even once the pandemic is over. It would make sense for businesses to capture some of the growth they have witnessed during the lockdown period, and make it a mainstay. It could be an additional source of revenue even once the pandemic is over.
Lastly, stay abreast of various forms of the public assistance available and other ways of bridging the gap as they become available. This landscape is fast evolving and being up to date helps. In Canada, federal and provincial governments have announced various forms of financial assistance for small businesses to support them in these tough times. The Canada Emergency Business Account (CEBA) provides interest-free loans of up to $40,000 to small businesses and not-for-profits to help cover their operating costs during a period where their revenues have been temporarily reduced. This program has been implemented by banks and credit unions in collaboration with Export Development Canada. There are other multiple assistance programs launched for various sectors by the federal government, which can be availed by the business owners. So, if you still haven't applied for these programs, you should do it now.
Empower your people
When operating a business through this level of uncertainty, planning is crucial to ensure success. As much of what the world will look like in a month is unknown, developing a crisis plan and better positioning yourself for any future roadblocks is a great way to not only prepare but also to maintain productivity and keep staff occupied through any downtime this crisis offers. In addition, in the event that this crisis plan has to be used, you will be thanking yourself as you will be able to lean on your prior work and avoid the many shortcomings that come while forced to make decisions under stress.
While much of the news around this crisis has been negative, one light through this all has been the renewed sense of community as we all work through these uncertain times. This is a lesson that should be brought and implemented within your business as you work with your employees to reopen. When much of remaining open and operational is reliant on your ability to maintain a safe, comforting environment for your customers, your ability to trust and empower your employees is at the centre of this initiative. They need to know why these decisions are being made, how it affects them, and empower them to see opportunities for improvement and take them.
Most importantly, it is important to remember that this crisis has brought on significant hardship for Canadians across the country. And as a business owner this is the time to focus on your employees as humans; understanding their needs, circumstances and offering a helping hand whenever possible to ensure that you and your team come out of this crisis stronger than ever.
You are vital for our economy
Do not underestimate yourself because you are a small business owner. Your success matters because businesses like yours are feeding the family of 7/10 Canadians. However, small businesses are more likely to fail. If you do not want to be like the 50% of small businesses that fail in the first 10 years, pause, re-evaluate and pivot your business constantly. COVID-19 forces you to be on pause but it’s imperative that you take a moment to re-evaluate your business and adapt to the new reality.
At MBCG, we are happy to help local small businesses by providing 10h of business consulting services free of charge to a limited number of customers. Connect with us to learn more!