How to prepare your small business for 2021

It’s hard to imagine a world without small businesses. But here we are nine months after the COVID-19 outbreak, bracing ourselves for additional lockdowns, closures and layoffs. The continual disruption of this pandemic won’t call for the textbook recovery we’re used to. However, with the right kind of preparation and mental agility today, small and medium-sized businesses can take a turn for the better.

Throughout all this uncertainty, our local businesses’ ability to pivot will become their superpower. Business owners need to find ways to adapt to new restrictions and connect with customers beyond their in-store operations.

If you’re a business owner on the front lines impacted by recent events, you’re not alone in feeling overwhelmed. Whether you’re struggling to improve cash flow or trying to modify your products and operations to increase demand, this is the guide for you.

We’ve assembled the best practices to give you better odds of keeping your business afloat as we head into next year.

1. Getting the most out of your bottom line

At the end of the day, what keeps your small or medium-sized business running is the cash fuelling it. You’ll want to take extra care during this time to cross your T’s and dot your I’s. Here are some additional things to consider when managing your financials:

Use cloud-based software

Go paperless. The last thing you need is a missing statement or inaccurate costs. Consider using an online accounting program that tracks your expenses for you, automatically calculates your profit and monitors your cash flow and taxation.

Cloud-based computing is good for more than just keeping the books in order in a convenient way. It also allows you to expand your business capabilities, like the ability to pay as you go, offer higher customer service quality, better manage your workforce and of course, have the added benefits of safety and security.

These factors can allow your business to become more flexible and scalable, even when you navigate through crises.

Negotiate with your vendors

Strike up conversations with your suppliers about stretching out payments or negotiating new terms such as monthly contracts instead of longer-term commitments. With less income and mounting bills, identifying the risks before they happen is key to maintaining your business.

For many business owners, renegotiating terms at this time can be an uncomfortable ask, especially if you’ve had a long-standing relationship with your suppliers. Be empathetic and show that you’re willing to work within your means to help them. Just as much as you’re trying to keep your doors open, many suppliers are doing the same, so agree on something flexible enough for both of you that will mitigate risks.

We recommend making amendments to existing agreements rather than cutting ties completely. Analyze every part of your supply chain process, from production to warehouse transport routes, and anything in between that can potentially become a bottleneck. Don’t let fear set you back from doing what could be more beneficial for you and your suppliers in the long run.

Seek financial support from the government

One of the saving graces at this time is government funding. Thankfully, small and medium-sized businesses impacted by the pandemic have support available to help them to offset a portion of their income loss and relaunch costs.

You may be eligible for a number of grants and emergency funds. Be sure to check your provincial government’s support programs for COVID-19 relief, and take advantage of these federal business resources:

• The Canada Emergency Business Account (CEBA): Banks are providing interest-free loans of $40,000 (soon to be $60,000) for qualifying small businesses and not-for-profits.
• Canada Emergency Wage Subsidy (CEWS): This subsidy enables you to re-hire workers, help prevent further job loss and ease you back into everyday operations.
• Canada Emergency Rent Subsidy (CERS): Qualify for up to 65 percent of subsidizing rent and mortgage support for your business.
• Business Credit Availability Program (BCAP): Credit to help cover operating costs, including small business loans, co-lending programs and more.
• Canada United Small Business Relief Fund: A $5,000 grant to buy personal protective equipment (PPE), renovate, develop or enhance your business’ e-commerce capabilities.
• Financial institutions: Apply for loans and credit through your bank. $12.5 billion was made available to the Development Bank of Canada and Export Development Canada.

2. Get in sync with your customers’ needs

It may be tempting to take a rain check on marketing efforts at this time, but next to cash, investing your time into the tools to understand your customers’ needs is the very thing that will keep your business going. After all, it’s who you serve that matters most.

Compare differences and collect customer data. Look back at this year and identify what the changes to your business are. Who are your customers, and how have they changed? Keeping up with your customer insights is crucial to understanding how best to serve your customers, what products or services still speak to them, and their buying behaviour ultimately determines what changes are needed from your business.

Leverage tech and insights. Technology is the most effective solution for understanding your customers. It plays an instrumental role in collecting information that can help you predict your customers’ spending patterns based on historical and transactional data.

Marketing platforms such as Neo for Merchants specifically helps small and medium-sized businesses target new customers, re-engage existing ones and grow profits by rewarding customers with personalized offers to spend more at their business.

Better yet, Neo is the only cost-effective platform that pays for itself. Its easy-to-use visual dashboard helps businesses learn what motivates their customers to buy from them and doesn’t require any costs, upkeep or new software or hardware.

Using tools like these can help small and medium business owners increase customer spend and build loyalty, which is needed now more than ever.

3. Diversify your delivery, product or service

When you’re asked to shut down or scale back business, opening up multiple streams of revenue will help you persevere. This primarily means moving your typical brick-and-mortar store and operations online to make room for new ways to engage customers and increase sales.

Physical to digital. As a business owner, you need to see what parts of your products or services you can enhance to make it easier for customers to access and buy. Restaurants have moved their menus online, so their customers can order with them through food delivery apps. Many retail stores have done the same and ramped up their online presence.

A complete switch-over may not be necessary, but increasing your number of channels will help you not only weather the storm now and in the foreseeable future, but thrive long after it’s over.

Expand your products. It may not be possible for some businesses to move their services online, but there are still ways to diversify what you offer. Look at your best selling products and see if there’s an opportunity to extend them. Don’t add new products just for the sake of it, but consider what value gaps you can fill. By expanding your in-person service offerings and hosting them on an e-commerce space, you’ll be able to generate an additional income source.

Many clothing boutiques, wellness brands, and local breweries have shifted their regular production to reflect their customers’ and community members’ needs.

Neo partners like Earth + Hide, a Winnipeg-based accessories brand, is now selling their high-quality leather kits with locally sourced masks and hand sanitizers. Gyms like Movement U in Calgary are hosting online fitness classes, renting out gym equipment, and live streaming their physically-distanced in-studio classes so that members can participate from home.

By expanding your in-person service offerings and hosting them on an e-commerce space, you’ll be able to generate an additional income source.

Recurring incentives. Another good option to diversify your business during this time is to offer a membership or rewards program. Instead of relying on one-time purchases, you can encourage customers to keep coming back for more when you offer them a personalized incentive, such as instant cashback. This makes your cash flow more stable.

How Neo partners have pivoted during this time

Neo teams up with thousands of Canadian businesses to help them grow and attract more customers using technology. In the last few months, we’ve seen many of them adjust their business models, products and services to reflect the current needs of their customers and the digital transformation that our world has rapidly adopted.

Here are just a few examples of how our partners have adapted to new restrictions.

• Picot Collective, a Victoria-based natural skincare and candles brand, is producing everyday essential hand sanitizer using their signature essential oils.
• Medium Rare Chef, who normally designs stylish culinary apparel such as aprons and kitchen shirts, has added reusable face masks as part of their lineup with 10% of every sale going to Mealshare.
• Lina’s Italian Market in Calgary offers curbside pickup and contactless grocery delivery, so their customers can enjoy fresh ingredients and meals without leaving the house.
• Crafty Cocktails, a Calgary-based gift basket store, is offering one-time and monthly subscriptions of DIY cocktail kits, so their customers can enjoy evening or weekend drinks in the comfort of their own homes.

When it’s all said and done, it is possible to make the best of a bad situation and have it work in your favour.

Adapting is your superpower

There’s no telling when things will ever go back to normal and if that’s even totally possible. The world has become increasingly digital during this time and has transformed customers’ expectations forever. At this rate, it’ll do more good to look forward than to look back.

Small and medium-sized businesses, who are among the hardest hit with COVID-19, can’t afford to wait for normal to begin again. As entrepreneurs, you can prepare changes to your business to reduce the negative impact.

Using available resources such as government financial support, marketing and rewards technology to better understand your customers, and diversifying your products, services, and delivery will help you recover in rapidly changing situations.

Along with preparing an action plan, talking to your business partners, keeping your staff informed and thinking ahead will put you in the right mindset to pivot your business at any given time, giving you the advantage to respond effectively. The challenges up ahead are far from over, but preparing now will help your business rebound stronger than ever before.