Helping Your Small Business Survive an Economic Downturn

Small businesses can thrive during uncertain times
Investing in a small business is hard work especially when you’re bootstrapping (investing your own capital or credit) in order to make it happen! No matter if you’re just starting out or if you’re pivoting like many are now — it requires a whole lot of planning, risk tolerance, and grit but small businesses can survive an economic downturn.

Recent developments due to the COVID-19 spread have left many small (and big) businesses exposed and vulnerable facing the uncertainties of a global pandemic.

And although many economically stable countries have put plans in place to quickly aid businesses, it is still unknown how long those governments will be able to continue fighting this problem while supporting the economy.

As people all around lose their jobs and businesses are unclear if they’ll be able to remain open, many may think there’s no way to succeed. However, even in economic downturns, there’s often room for growth and new opportunities — they are called counter-cyclical businesses.

It’s not unprecedented that many businesses thrive and many others begin in times like these and there are several examples of businesses that succeeded in the midst of a recession. One of those companies is the Toll House Cookies. In 1933, just as the US was pulling itself out of the Great Depression, small business owner Ruth Wakefield invented what would become one of the most popular cookies in the world: the chocolate chip cookie! Toll House cookies recipe for chocolate crunch cookie was later sold to Nestle.

Many people attribute that success to Ruth Wakefield’s attention to details and outstanding service, in addition to serving delicious meals at her restaurant, the Toll House Inn- which resulted in her creating a great product that leads a market worth over $30 billion annually.

In their article Roaring Out of Recession for Harvard Business Review, Ranjay Gulati , Nitin Nohria and Franz Wohlgezogen found that “(…) companies that master the delicate balance between cutting costs to survive today and investing to grow tomorrow do well after a recession. (…) These companies reduce costs selectively by focusing more on operational efficiency than their rivals do, even as they invest relatively comprehensively in the future by spending on marketing, R&D, and new assets”.

A crisis, at any level, is disruptive. During times of intense disruption, like the COVID-19 pandemic, a few things might help small businesses keep on track and not only survive but thrive. Every crisis is an opportunity to earn the trust and credibility of customers, partners, community, and family by finding ways to help them deal with the circumstances.

It’s important to try to navigate the risks posed by the crisis in a way that will allow businesses to sustain minimal damage and, at the same time, prepare for what will come after the crisis in a world that we are yet to know but will, most likely, be different than what it is today.

There are some immediately actionable responses that are worth applying to both new and existing small businesses at this time but one thing is for sure — rolling out or improving their digital presence is a must! Having an e-commerce website, using mobile applications, and community and social platforms are the best tools to help them better position themselves for growth and or exploring new business models.

The reality for many small businesses is that they don’t even have a website and their objections are most often the same: they don’t understand how to get one and how it could help their business, they believe it’s too expensive and complicated, and/or think they’re fine without it.

However, with the world upended due to possible prolonged quarantine periods and the personal financial challenges most people are experiencing, the consumer relationships will drastically change and these objections will have to be overcome.

Any business, more than ever, needs to be fully discoverable online. Beyond that, they need to communicate to potential clients what their values are, what innovations they are offering due to dealing with the new circumstances, and new ways they have found to serve their customers.

People are looking for meaning in their new relationships and all small businesses should learn to leverage social media to their advantage as it helps spread the message about who they are and what they can bring to their potential clients.

The Salesforce Shopping Index shows that people, especially Gen-Z consumers, look to social channels as an information resource (up to 34%). Small businesses that take these measures, and let consumers know about them through their multiple online channels, will not only bring a sense of hope and normalcy to potential clients’ lives, they will also have the added benefit of humanizing the company and keeping it meaningful.
Some ways small businesses can rise to the occasion and respond to this crisis are:

1) Update any listing to social media and online directories to highlight any operational changes during this time like their store hours or if they now offer delivery options — this applies to Google My Business, Yelp, Trip Advisor, and Facebook.

2) Create or refresh their website — nothing is business as usual anymore. Clients have other concerns in mind when they are looking for products and services now. They are wondering if the business is still open, if a certain product is available or if a service can actually be performed. Websites must be ready to answer those concerns without the client having to ask questions.

3) Create social media accounts to visually and quickly communicate with clients. Happy customers can leave positive reviews, tagging the business or sharing the business’s posts on their feeds, which will lead their circle of friends and followers to eventually hear about the business and be more likely to be interested in trying out the services or products too.

4) Participate in Facebook groups (local or even national) in order to introduce the business to a community that might be interested in learning about the products or services offered.

5) Join online forums for small business owners to have a community of like-minded people that help each other discussing issues and finding solutions. They can prove extremely beneficial in times of crisis as they present an opportunity to fill gaps of knowledge a small business owner might have, get or give advice and have a sense of community. There are several forums both within social media platforms like Facebook and LikedIn, as well as independent entities like Small Business Forum and BizWarriors, amongst many others.

All these and other important steps to remain visible during social distancing times may seem unmanageable for small business owners but they are not alone.

Digital agencies like Ingols Digital have stepped up to support small businesses in the multifaceted task of giving them a consistent and streamlined online presence that will generate leads and can allow business owners to focus on their products and services.

Living and thriving in this crisis will require Small businesses to adapt fast to the digital world. Independent companies will have to take ownership of their new circumstances, as much as possible, and adopt a client-centric attitude, stay in tune with people’s wants and needs at this moment.

Finding creative ways to stay connected and strengthen the relationship with current and potential customers will build the foundation for a continuing relationship throughout and after this crisis.

Written by Danny Rodrigues @ Ingols Digital Small Business Listener!

Partner of Ingols Digital @ingolsdigital and Ingols Imports.