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We are living through a very uncertain time — from day to day it seems almost impossible to predict what will come next.
It’s easy to see that the rather dramatic occurrences in 2020 have impacted businesses of all sizes, and especially small businesses. One study of 5800 small businesses in the US pointed to the fact that smaller companies tend to be “financially fragile,” which only exacerbates the problems that face them during times of national crisis, for instance.
It’s impossible to fully predict what will happen in 2021 and beyond, but there are strategies that can help small businesses stabilize and grow. Let’s discuss five of them here.
Build multiple revenue streams
Plenty of content has been compiled on multiple revenue streams and how to create them and there are even business experts that tout a variety of revenue streams as the most surefire way to become a millionaire.
Of course, everyone wants to be a success. So whether your goal is to become a millionaire or not, looking into multiple revenue streams within your small business is worth the effort.
Very few businesses are built around a single product. It’s nearly impossible to sustain a business with such a narrow focus. The more products you have to sell, the more likely you are to be a success.
But building multiple streams of revenue is about more than just selling different products — it’s also often about marketing from different platforms, to different customers, or creating passive income. Potential revenue streams that could be added to your product line include a variety of ideas, such as:
Complementary products, such as tools that are required in order to use your main product
Consulting services, appealing directly to the people who use your product
Installation and maintenance services that facilitate the use of your product
Think of it in percentages. If your main product makes up 80 percent of your revenue, then if it gets hit by an economic downturn, you’ve lost 80 percent of your overall income. If you have ten different revenue streams, however, and you lose one, you still have 90 percent coming in. Those are two extremes to illustrate how it can work, but how you put it into practice depends on you.
There’s really no limit on the different types of revenue that can be added to your main source. It all depends on the type of business you run, the need in the market, and your own imagination.
2. Find funding before you need it
Every good business owner realizes that there will be good times and bad times for the business. Smart business owners look for enough funding, secured in the right way for the right time, to get through the bad times.
This means accurately assessing your needs as a new business, and keeping a finger on the pulse for what is to come in the future as you grow. Your needs won’t just be internal, such as paying for overhead; those financial needs should also continue to change as you create new products, reach new customers, and build your business.
Don’t wait until the last minute to look for funding. The world’s an uncertain place, and having funding will help your company to weather the storms that may come without notice. Keep your funding in place for when it is needed, whether through investors and backers, through small business loan programs, or through your own savings if absolutely necessary.
3. Leverage your branding to build loyalty
One of the most important aspects of a successful business is the loyalty of your customers. If you create a brand that is worthy of loyalty, it will be that much easier to sustain your company in times of economic downturn. Even if your customers can’t shop with you as often or as extensively as they might have before, they will still do their best not to turn their back on you. Leverage that loyalty in a number of ways:
Reward your customers for their loyalty now. Put a loyalty program into action; give them rewards for sharing your business with others; and focus on how valuable each one is to your company. Make it personal.
Reach out to your audience on social media. Create conversations that allow them to see your brand as authentic. Around 90 percent of consumers cite authenticity as a deciding factor in the brands they support.
4. Invest in your customer service
Customer service often takes a backseat in terms of strategy. You might assume that customers want to be loyal, especially if you’ve invested adequate time into building customer relationships, marketing effectively, and reaching out on social media.
Those elements can be treated as the groundwork but do take pains not to disappoint them. Respond to questions or concerns quickly. Don’t ever ignore a customer who reaches out.
If customers have only negative things to say about your business, do whatever it takes to make it right. It’s far more expensive to have a disgruntled ex-customer spreading their horror story around than it is to make their next product on the house.
One of the best ways to do this is by integrating an excellent customer service system into your website. If you can’t have a service agent standing by at all times, use a well-designed chatbot that knows when to bring in a real human. Send acknowledgment messages when you get emails, and always follow up on any correspondence.
Basically, make your customers feel like they matter to you. If they don’t matter to you, you won’t matter to them when the time comes for support and loyalty.
5. Create a unique identity
The final key for building a small business that will recover from any economic downturn is to create something truly unique. As you build your customer base, pay attention to feedback, gaps in the market, and other indicators to tell you what’s missing; if you have a product with a lot of competition, look to what details can make you truly stand out from the rest.
Along with a unique product, create a unique brand identity — harmonize your messaging, visuals, social media presence, and all other aspects to create something that is completely distinguishable from other companies, which draws the attention, and which creates a personal connection with your viewer through each and every aspect.
Ultimately, no one knows what might happen to our economy in the coming year. But following the old adage, “Hope for the best and prepare for the worst,” isn’t a bad idea. If you make sure that your small business is in a position to recover from any potential economic downturn, you can plan for the future and for the successful growth of your company.