After the chaos of the last two years, many small-business owners feel they are ready for anything.
According to the Small Business Recovery Report published by Kabbage in June, which provides financial solutions to small businesses, more than four in five U.S. small-business owners (SBOs) are concerned there will be an economic recession soon, but 80% are confident they can survive it.
The research polled 550 SBOs from a variety of industries in spring 2022, and found that more than one-third (31%) said the COVID-19 pandemic – and the resilience they developed as a result – was the leading reason they were prepared to withstand a recession.
Branding and marketing is a key area in which small businesses have upped their game. Kabbage’s survey showed that 44% of small businesses with between 11 and 500 employees are marketing to customers through social media and other digital channels that are different from those their competitors are using.
Overall, respondents’ online sales have decreased from 57% at the height of the pandemic to 40% today. However, Kabbage’s respondents reported that certain industries, such health care, are still seeing a boost in online sales, which contributes to these companies’ confidence that they can weather forthcoming economic turbulence.
I spoke with SBOs who have worked out strategies for thriving in the year to come, including establishing market leadership, adapting their delivery models, and improving their employee experiences.
Establishing Market Leadership
At the beginning of the pandemic, many businesses struggled to stay afloat, and some vowed they wouldn’t be this vulnerable again if they could help it – they would put the pieces in place now to ensure future market dominance.
Joe Mullings, CEO of medtech talent acquisition firm The Mullings Group, echoed Kabbage’s research results illustrating that innovative marketing is a crucial recession-proof tool. He intends to survive a potential economic downturn by increasing efforts to build his organization’s brand, and is specifically targeting thought leadership approaches to promote audience awareness and share success strategies.
“We want to provide content that educates, informs, and inspires those in our industry on platforms like LinkedIn, which has emerged as the most robust business-to-business marketing tool of all time,” Mullings says. “Organizations that invest resources of time, intelligence, and money to build their brands during recessions, pandemics, and supply chain challenges will be much further ahead than those who don’t.”
Mullings launched his video podcast, The Other Side, during the pandemic, and the show continues to be an important vehicle in establishing market leadership. “We reach out to executives in the medtech and healthtech industries and invite them to discuss how they are transforming their businesses to come out on the other side stronger, out loud and in real time,” Mullings says.
Adapting to New Delivery Models
In 2020 and 2021, many businesses slimmed down brick and mortar operations, moved certain services online, and experimented with e-commerce – meeting isolated customers where they were. Many also moved to more agile workforce models so they could increase or decrease staff size and/or move people around as business and market circumstances dictated.
Cali Yost, founder and CEO of consulting business Flex+Strategy Group, has been adjusting the manner in which her firm provides services to corporate clients. Since her focus is on flexible work strategies, she anticipates that demand may actually increase in a potential recession as more leaders will lean into alternatives in how, when, and where they operate.
Fortunately, Yost learned from her experiences in 2020 and 2021, in which she had to rapidly grow her business’s capacity to leverage the opportunities remote work provided. “Before COVID-19, we had an in-person delivery model, and when we expanded quickly, we had to adopt digital tools and processes to scale in the most effective and efficient way,” she says.
Yost isn’t alone. Many businesses have invested in digital transformation efforts that will allow them to pivot quickly in the likely event of future disruptions. Yost hopes that her pandemic-fueled adaptation strategies will serve her well if she needs to offer a greater number of customers more varied services in the rest of 2022 and beyond.
Improve the Employee Experience
In the tightest labor market in decades, even small businesses with only a few employees are recognizing the necessity of providing a work experience that’s transparent, meaningful, consistent, and simple to navigate. This way, if a recession or another disruption threatens the business, at least workers can count on some degree of stability from their employer.
Adam Riggs, CEO of software firm Frameable, understands that his employees are a core element of future business viability in a recession. “We hire, onboard, and train very thoughtfully, which all together leads to high confidence that every one of our employees knows what they need to do,” he says. “Weathering a difficult stretch is more manageable if the whole team is committed to both excellence in their own work and to proactively and responsively helping their colleagues however they can.”
Riggs aims to create a suite of products and an employee experience that facilitates high performance regardless of economic conditions. But he also took away a critical lesson from the COVID-19 pandemic: A people-centered culture is essential across the board, but especially during periods with ongoing disruption.
“During the pandemic, handling the intense combination of personal and professional pressures required that we all develop deep, genuine empathy for one another – not just our friends and family but also our customers and colleagues,” he says. “Although we are now returning to normal life in some ways, keeping that empathy front and center will make future challenges more surmountable.”
More than two years after COVID-19 upended the world, the small businesses that are still standing have mastered the art of looking around corners, anticipating the next pivot, and leapfrogging their competition. They know they are among the few who have proven their mettle already and have the ability to do so again. They look to the future not with fear, but with excitement.
Organizations that invest resources of time, intelligence, and money to build their brands during recessions, pandemics, and supply chain challenges will be much further ahead than those who don’t.
—Joe Mullings, CEO, The Mullings Group
Joe Mullings showcases this newfound self-assurance by fully embracing his company’s current market status. “All organizations want to disrupt their industries, but over the last 36 months, we’ve dislocated from our competitors in a way that’s much bigger than a disruption,” he says. “A disruption is a speed bump: A competitor can still catch up to you. On the other hand, a permanent dislocation is a forced move out of normal position and requires entirely new techniques and approaches.”
Photo: Getty Images