Written by: Lina Rugova, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
Every year, businesses face a variety of challenges when it comes to overcoming problems. These may relate to production issues or expansion obstacles. However, small businesses, in particular, go through various obstacles to reach their business objectives. Starting a business may be a big achievement for most aspiring entrepreneurs but keeping up with everyday challenges is even tougher to accomplish.
From finding the ideal workforce and dealing with technical glitches to building a credible brand image for the company and adapting to changing technology, problems are endless. What makes things even worse is the challenges continue to change shape and form over time. That means small businesses have to deal with newer challenges every year as per the changes in market demand and the economy, which is troublesome for many considering the industry's vast shifts.
A small business that fails to overcome such obstacles is most likely to go out of business or suffer adverse consequences. Therefore, a business must respond to shifts and changes accordingly to maintain the business and expand existing networks as per their business objectives. The thing about these challenges is that they can be unpredictable. Sometimes, no amount of preparation is adequate. In 2020 alone, businesses, in general, had to go over a lot of shifts impacting their cash flow management severely.
This article will go over the top 5 challenges small businesses are most likely to encounter in 2021 and beyond.
1. Remote Working
As the COVID-19 pandemic continues to shape our lives and we adjust to the new normal, it has disrupted the livelihood of small businesses to great extents. Employees must adapt to new ways of working in an attempt to withstand market pressure and economic downfall. Organizations worldwide have reverted to the smart way of working, which is by taking advantage of remote working. Thanks to technological developments, larger businesses were quickly able to cope with the situation by asking employees to work from home and engaging in online video conferencing for meetings and more.
Small businesses, on the other hand, were slow to adopt this tactic. Most of them lacked strategic thinking to anticipate such a work shift. Some of these businesses were able to make their way out of the struggles, while others had to suffer. Remote working is a relatively smart option considering employees are not expected to arrive at a specific location just to keep up with the formal business environment. While this was a form of working businesses opted for particularly to effectively practice social distancing without causing a hindrance in their business management, the idea has seemingly worked.
Currently, businesses are still moving forward with remote working and are doing quite well with their respective operations. So much so that employees are not only used to this new normal but prefer it over the traditional way of working. As for 2021, one of the primary challenges that a business is likely to face is the idea of remote working. Not all companies favor it, as some may find that it does not give the desired results. Meanwhile, others cannot adapt because they lack technical knowledge. To address this small business, have to cope with working from home and develop strategies accordingly that support such factors.
On the bright side, remote working can be very effective, and with the right techniques, it can be more advantageous than working in an office. The biggest pros are that on-site costs are non-existent, holding meetings has never been easier, and team members can participate in business operations from anywhere in the world. This allows employees to be more efficient in their work patterns. They feel motivated to contribute to their company. So while it may be a challenge at first, it can be very beneficial for small businesses, especially to engage in such a working method as it reduces costs and promotes efficiency and productivity. It gives more opportunities for these businesses to grow and expand in the future. It is no wonder that even larger businesses are considering increasing the working days in a week as employees continue working remotely.
2. Unemployment
Another problem that most industries are facing, in particular, is unemployment. Numerous vulnerable businesses couldn't withstand market pressure or were unable to keep up with the entire situation. Therefore, they shut down their businesses once and for all.
Small businesses that were dependent on on-ground operations with minimal market segments to cater to were prominent among those who suffered. Unemployment significantly rose in 2020. To maintain business operations and prevent the business from undergoing huge losses, they had to reduce costs to the bare minimum. This ultimately meant saying goodbye to even some of the most trustworthy and productive members of their workforce.
Unfortunately, this is something that companies are still dealing with months later. Client dependence is common, especially with small businesses where most of the business's income comes from a sole client or two to three significant others. With COVID-19, the situation is so unpredictable that even such clients face immense hardships with the economic downfall. This means bad news for the business that was depending on them. The company may lose significant clients, and it could be tough to pick up from that point and cater to other clients to recover losses during this process.
Businesses must not only respond to changes quickly but also learn from mistakes. Moreover, they need to move on and develop strategic business plans to address these concerns before the need to shut down operations arises.
For 2021, the circumstances do not look any different. Unemployment is still a major concern, and while newer businesses will be open to many options and opportunities in terms of the labor force. At the same time, they will also be looking at an economic recession where even consumers and target markets suffer from effects. This can vary greatly on the kind of business and the target market/income group it has.
3. Technological Updates
To further complicate things, technological updates are another factor that businesses must keep up with. It may be ironic to note, but while the pandemic had seized physical business operations, it gave rise to technology developments. These filled the gaps and catered to business operations quite normally. In some cases, they helped make processes more effective.
In 2021, we are likely to progress with 2020 still haunting us, and therefore, things will not be as different. Small businesses must devise creative strategies based on technological updates. They should have contingency plans for when they need to respond to new developments. A business that fails to respond to such demands in a working environment is likely to suffer adverse consequences, considering consumers would eventually move on to competitors if they come across a better and suitable option. Technological updates can also be costly in some cases.
Therefore, as a small business, you must plan accordingly to ensure you manage your business operations quite smoothly without disrupting production.
4. New Generation of Workers
From baby boomers to millennials and generation Z. The new generation of workers in 2021 will be more prominent than ever. This is a cause of concern for most Human Resource departments as they would need to plot which workforce may be beneficial for their company and for the role they were recruiting for.
A company that relies solely on a specific generation of workers may be taking a risk. A smarter approach would be to include a dynamic working environment. Such changes will allow them to work collectively in an uprise of newer challenges the company might face.
While most HR departments rely on what is in demand and are likely to recruit individuals based on their academic background, finding employees with soft skills is important at this point. From a team player attitude to adaptability, to work ethics and growth mindset, all these factors come into play from an employee possessing soft skills. Sure, academic background and experience are necessary, but soft skills are a bonus. This especially applies to companies working with a dynamic working environment, something we will see in 2021.
5. Newer Marketing Strategies
Consumers are now bored with traditional marketing forms from the same brands and are now looking for something different and extra. This mindset has led efficient businesses to adopt some newer and unique methods of marketing their business. Some of these methods include video and written content. Video content continues to attract customers from everywhere, and the best way to make use of it is through social media apps and platforms.
Not to mention, a significant portion of the target markets are likely to go over video advertisements while they casually get through with their day as they scroll on their smartphone. They are also more likely to notice it than chunky billboards and infographics that block the screen. Written content is just as effective; customers are now buying the idea of companies enlightening them about their customers about their products and why they may need it. It is the perfect strategy to showcase the importance and impact a single product can bring to your life. Therefore, smaller businesses have to develop business plans every year and look at various marketing forms to attract customers from everywhere.
A quick response to changes that we may see in 2021 is likely to be safe from the adverse impacts it could have over one that is unable to do so. With new entrepreneurs stepping in and taking initiatives, businesses like these must maintain their operations by thoroughly plotting their business objectives and action plan.
Lina Rugova, Executive Contributor Brainz Magazine
Lina G. Rugova is a growth strategist, consultant, and coach who teaches business owners how to re-engineer and scale their businesses to the next level by creating a strong market-dominating position. She helps clients address their weak areas, build a personalized development plan, and execute their new high-performing business and marketing strategy with confidence and clarity. Her mission is to change the statistics of those small businesses that fail within the first year.
