Companies of all industries and sizes saw loss of revenue, reduced budgets, wage cuts and temporary closures. Now, they’re exploring their options, looking for cost control opportunities. So what does that look like for smaller companies with smaller the profit margins? No one can say for sure what methods will work out. However, some options are setting companies up for success. Here are five small business trends we’re seeing in the current market.
As quarantine kicked into full swing, family restaurants that were typically dine-in pivoted to offering take-out and delivery. Many places still have these offerings, and other brick and mortar stores also went down this path. No one can say is foot traffic will ever return to pre-pandemic levels. However, eCommerce provides greater reach and offers more avenues than a strictly in-person place of business.
Many small businesses expanding their online presence are also looking to expand in other ways. Whether it’s a greater diversity of products or altogether new offerings, this is a risk with designs on a reward. Small businesses analyzing how buyers react to provided goods and services and finding success in expansions of the offerings are in a better place than less ambitious competitors.
Losing customers is a nightmare for small businesses, especially when they’ve become a dependable source of revenue. Keeping a customer is no longer as simple as providing the good or service. It’s also a justification of the money they spend, a reminder of necessity. Small businesses can encourage loyalty in consumers with rewards programs. Small businesses targeting other businesses should make connections and explore other ways they can provide invaluable support to their customers.
A company is its employees. Many of those companies learned their employees could work effectively from home during the pandemic. The flexibility this offered has lead many companies to implement a hybrid program. Employees will work from home two or three days each week and in-office on the others. Clearly, this is not an option for all industries. Companies with employees tied to a business location can also offer greater flexibility. This may come in the form of better PTO, phone reimbursements or other benefits. Vehicle programs are another opportunity to offer employee benefits. Remember, an engaged employee is more productive and invested in their work.
Whether the operation is one person or a team of 30, all small businesses need the capital to start, thrive and, ultimately, survive. According to a report by Guidant Financial, most small businesses are financed with cash. However, credit, small business administration loans and family and friends also play their part. What does creative funding look like? That depends on the targeted customers. Cryptocurrency may be an acceptable form of income for a web hosting service provider, but maybe not an ice cream shop. Crowdfunding might not gather a lot of steam for a small real estate agency, but it might be just the thing for a unique board game creator.
Small business trends used to favor company-provided vehicles and car allowances. These options either provided a benefit to the employee or were easy to set up. Unfortunately, neither of offering is very flexible. Company-owned vehicles expose businesses to lawsuit risk and car allowances result in tax waste. That’s why many small businesses are switching to a fixed and variable rate (FAVR) reimbursement.
FAVR uses automated-mileage tracking, enabling employees to seamlessly capture their mileage and submit receipts. Companies can then provide them with a fair and accurate reimbursement for the business use of their personal vehicle. It’s a much better cost control option than spending thousands on purchasing or leasing vehicles, providing gas and maintaining them. It also provides IRS-compliant, tax-free reimbursements.
Coming back from the pandemic may be a steep hill to climb. In order to survive, small businesses need to get creative and find new ways to simultaneously grow and control costs. Expanding markets and exploring financing options are as important as retaining customers and providing for employees. So where should you start? Learn how much you can save by switching vehicle programs by joining our webinar.