Xero is a well-known and regarded cloud-based accounting software company for small and medium businesses, but they have also grown to become a trusted source of research and information.
One of their most recent releases has addressed the biggest challenge facing businesses (and private lives) in 2020, COVID-19. Xero commissioned a study titled The Next Chapter for Small Business in order to understand the impact of the pandemic, and also to determine how SMBs can bounce back.
According to the Sensis Business Index report, Australian small business confidence has reached disturbing lows, with 64% of business owners believing the economy is declining, and a further 30% saying it is at a standstill.
In order to help small businesses take steps forward, Xero surveyed more than 1,000 SMBs and combined their findings to offer five key recommendations.
These five recommendations are all based on the actions and habits of small businesses that have thrived throughout the downturn.
1. Use cloud-based tools to increase efficiency
Xero found that the businesses that thrived throughout the pandemic were those that adopted cloud-based tools and had a higher percentage of online revenue.
“To support revenue coming from online channels and help businesses better acquire, serve, retain, and engage customers at scale, companies need cloud solutions that provide more flexibility and cost effectiveness,” the report explained.
Many of these thriving businesses were those that had cloud-based tools and online portals in place before the pandemic, making the most of the efficiencies available by avoiding manual, paper-based systems.
If you are yet to move your business online, now is the time.
2. Make financial information digital
Are your financial records stored in physical filing cabinets? Xero highly suggests moving those statements, payrolls, and cashflow documents into the digital space so they can be easily accessed (with the right security systems in place).
According to the survey, as many as 74% of small business owners used government funding to stay afloat during the worst months of the pandemic. This may not have been possible without easy access to the financial information required by funding departments for application.
Moving key financial records and documents to a cloud-based storage system or even a protected intranet can ensure they’re there when you need them most.
3. Use data to predict and plan for the future
Xero found that businesses that fared the best through the pandemic have been those that relied on data, or professional advice, to make decisions, rather than their own instincts.
They also discovered that 34% of small business owners use their own instincts to make decisions, compared with 47% who make decisions based on customer feedback.
Those that have fared well have been those that use customer insights, data analysis, and professional advice in order to make important decisions. If in doubt, seek help or use the data you have at hand to inform your business choices.
4. Use the power of your ecosystem
First things first – assuming Xero isn’t talking about that lovely wattle tree outside, what is an ecosystem?
In this instance, your ecosystem is your available network of business support. This could be support from the community, government, state or territory, business associations, local councils, or business partners. And according to Xero’s results, SMBs that sought help from their ecosystem tended to do well.
“They (SMBs) must be resourceful in seeking out available help, starting from within the company where an accountant or human resources manager can point them in the right direction,” the report explained.
Essentially, don’t overlook, and certainly seek out, assistance and advice from your own ecosystem.
5. Create emotional connections with customers
Finally, businesses that genuinely connect with customers have been the most likely to succeed through the crisis.
An overwhelming 93% of customers in the study said that when a business demonstrates empathy, that makes customers more likely to trust them, recommend them, and buy from them.
From email newsletters to reaching out via social media channels, online marketing strategies, or investing in advertising, creating that connection with audiences can be extremely valuable.
White Pages Connect helps you to connect to your audience by helping you to stay on top of your online presence. It’s a tool that allows you to track your performance, update your listings, manage reviews, and engage with customers all in one place, so you can start bouncing back sooner.