Trends emerge from a constant cycle of innovation – how humans and businesses interact to achieve success. In 2020, businesses of all sizes faced some of the biggest and weirdest challenges they have ever encountered. How they adapted to survive has changed the way we will work and do business in the future.
In this first of two articles looking at small business trends for 2021 we examine how the needs of employees and customers have changed and how that will impact future commerce.
Remote working will become even more important
We have discussed this before, and while remote working is not new, how it is perceived has changed significantly in 2020. The technology for remote working has been available for a while, but suddenly the advantages are much more apparent – increased productivity, flexibility and reduced costs.
Technology has provided the ability to manage a huge range of business activities online, from office administration and time recording to accounting, finance and project management. Businesses are increasingly likely to take advantage of these opportunities. In early 2020 almost 50% of businesses said they planned to move IT to the cloud, up from 32% a year earlier (Forrester study, 2020).
The ability to stay productive from anywhere always sounded like a good idea and the events of 2020 proved it. According to Xero, businesses that ran online systems did better through the economic upheaval. Among their 2.3 million users, those that used at least one other Xero business app suffered 12% less revenue loss than other businesses, and those that used five or more other business apps suffered 33% less revenue loss than other businesses (Xero SBI, 2020).
Workplace flexibility is here to stay
It’s not just remote working that looks like it is here to stay. Workplace flexibility, the age old 9 to 5 job, has also taken on a new light. Small businesses have always had a closer relationship with their employees. In the past they may have had to dip into savings to meet the needs of the payroll and in return employees gave hours of dedicated service.
But 2020 took this to a whole new level. Employees were asked to work fewer hours or take pay cuts in order to ensure they still had a job at the end of the day. In return they asked for more flexibility to support family, friends and their communities. The traditional working week has become a thing of the past and working hours that balance, or integrate, work and life is becoming far more normal.
Selling online will be all the rage…again
A bit like remote working, e-commerce has been around for a while, but many businesses did not have a huge need for it – that is until 2020! During lockdown, up to 58% of customer spend happened online and businesses said online sales accounted for 12% more revenue than normal (Forrester study, 2020). There is also an argument to say that during lockdown consumers were trained to shop online for certain items and may never return to a traditional, physical store.
The software to support e-commerce is also easier to build, particularly for small businesses, and it is safe to say that this area, along with online marketing, will continue to grow.
Flexible payments have proven their worth
Customers have seemingly endless options when it comes to purchasing decisions and it has long been agreed that flexible payment can provide a competitive edge. In 2020, lots of customers around the world asked for longer, or more flexible, payment terms. In the UK, for example, small businesses had to wait an extra 7 days longer to be paid in May 2020 compared to February 2020 (Xero SBI, 2020).
And the vendors had little choice but to accept extended payment terms, instalments or offer new ways to pay. After all, getting a percentage of what you were owed was better than getting nothing at all.
Many businesses also started accepting credit card payments for the first time. According to Xero, credit card processing services became one of the hottest searches in the Xero app marketplace from February to July (Xero SBI, 2020). As far back as 2017, invoices that offered convenient ‘pay now’ options via credit and bank card were paid 30% to 50% faster (Xero user data, 2017). So don’t be surprised if this business trend continues.
Small business tech is on a roll
As the trends for remote and flexible working for employees continue and customers shop more online, the need for small businesses to adapt to these trends becomes ever more important. Technology is the fundamental tool to aid this adaptation, so it’s fair to say that small business tech is going to continue to play an important role in future success!
There are other solutions too. Business Process Outsourcing (BPO) can provide businesses with access to the technology they need without the huge upfront investment. If you are wondering how BPO can help you adapt to these new business trends, then give us a call.