If the last two years have taught us anything, it’s that a resilient strategy, grit, and sustainability are now table stakes in the success of any small business. While many may think that resiliency is ingrained in business owners, I believe there are strategies that can be implemented to build resilience which help you to be better prepared for a world that continues to be more complex and fast-paced every day.
Small businesses have been challenged by a global pandemic, supply chain disruptions, and more recently growing inflation. Businesses that have successfully adapted to this disrupted environment have done so by taking identifiable actions to survive and grow, proving the value of a clear strategy, and most importantly, a culture of resilience (the capacity to recover quickly from roadblocks).
According to the Institute of Management Accountants’ (IMA) report, Thriving Amidst Challenges: A guide to small business resilience, there are three areas which small businesses and their accountants should focus on to build resiliency. These areas include:
An essential part of building a successful business is having a clear purpose and vision. Visionary leadership means staying focused on your purpose and values, and allowing them to guide all of your decisions. This can help you stay the course even in the face of challenge and disruption. It’s also about understanding the importance of technology and using it to streamline processes and increase productivity. Visionary leaders understand that plans may change, new trends or technology may arise and that being open to these changes can make you more agile in responding to them – a great advantage of being a small business. Embracing visionary leadership can help you develop a growth mindset, enhance creativity and become more confident in dealing with change.
The IMA report discusses how small businesses have had to reevaluate almost all aspects of their business over the past couple of years. For many small businesses, the pandemic and other recent events have exposed areas of weakness that, with the right business focus, could be turned into new opportunities.
Carefully and regularly reviewing business processes challenges you to find new perspectives or areas for improvement. I strongly recommend working with an accountant or bookkeeper to go through this process – and to do it regularly. Together, you can look at how your business has changed and identify new risks you need to plan and adjust for. This will help you proactively build more resiliency into your business over time to help combat challenges.
A key trait of resilient businesses is having a positive, people-centric culture. Actively communicating and listening to your people helps ensure they feel valued, heard and supported. Positioning change as positive and having clear communication is key. This helps your team feel more confident in dealing with challenges. As change arises – for example, adopting new technology – having a people-centric culture would mean that employees feel like they understand a) why the change is happening, b) how it aligns with your values and goals, and c) that the change provides opportunities for learning, creativity, and efficiency.
A people-centric culture can also have a ripple effect to your customers. If they see your business as having a positive culture where everyone and everything is aligned to one clear purpose, they’ll have more trust and confidence in what you’re doing and more likely to want to be part of your story.
A fascinating callout here is that these very qualities and practices live to be true in what we like to call “Adopters” – a term coined from our One Step behavioral science study. Adopters are a subgroup that welcomes the digital revolution and the idea that technology is necessary in business to keep pace with the evolving world.
It’s no argument that small businesses are often the hardest hit when external challenges arise. To help prepare for the future, it’s helpful for small businesses to understand how and why there is a correlation between technology adoption and resiliency in business.
Our research shows many small business owners are still hesitant to adopt new technology – we call this subgroup the “delayers”, and the study shows one in three small business owners fall into this category.
What’s problematic about this reluctance is that it doesn’t promote resiliency in any capacity; in fact, it makes businesses more vulnerable to being out-performed, stressed (financially and mentally) and disillusioned. Not to mention less efficient and less likely to have meaningful information about the health of their business in real time.
Technology adoption has played a huge role in how small businesses navigated recent challenges, and ultimately in their business’ resiliency. Some used tech to stay connected to their team and customers during lockdowns, while others found digital solutions to be the difference between closing their doors and maintaining a regular income.
I encourage small businesses to use the past two years as a learning experience for challenges that could surface in the future. Working with an accountant or bookkeeper, and using digital tools can help small business owners to make more out of your business now, so you can tap into opportunities ahead. Building these strategies into your business will help your business better cope with challenges and changes that arise, because as they say, change is the only constant. Being ready to embrace change and flex with the ambiguous environment is the most effective way to continue to serve your customers and achieve your aspirations.
Rachael Powell is the Chief Customer Officer at Xero.