As markets and customers evolve and change, businesses need to adapt. And there have been few times that accelerated this process as markedly as the COVID-19 pandemic.

Many small businesses have changed how they operate to respond to safety concerns, regulatory requirements, and customer preferences. A May survey by Vistage and The Wall Street Journal found that nearly half (48%) of small businesses added products or services because of the pandemic.[i] Some have added services like curbside pickup or contactless payments due to customer demand. And others have introduced remote work or ecommerce to their operating models.

Such resourcefulness—a small business hallmark—is essential to operating in uncertain times. However, before you change your business, there are four key steps to plan your pivot.

  1. Look at the landscape. Even in challenging economic times, there are opportunities. Think about how your customers’ needs and preferences are changing, as well as how your business can respond. During the pandemic, local businesses had to find ways to serve customers safely, so they added features like curbside pickup and contactless payment options. Fifty-seven percent of consumers started buying from a new business because it had such services.[ii] Think about the new products and services you can add to the mix to attract new customers and boost sales.
  1. Do a business check-up. In addition to what you offer the outside world, there may be internal operational changes you can make to improve efficiency and even reduce costs. Automating more tasks like scheduling and email marketing may free up time and resources that could be devoted to more important initiatives such as planning or sales. Shifting some or all of your team to remote work could reduce your need for office space or improve productivity. In a recent survey, management consulting firm Mercer found that 94% of employers say productivity has remained the same or increased as more employees have worked remotely.[iii] Review your internal processes to identify opportunities to increase efficiency.
  1. Test changes. While the pandemic accelerated change, not all transformations need to happen so dramatically. As you identify the operational changes you wish to make you can introduce them in a more controlled manner. For example, try offering curbside pickup options on weekends at first if that makes sense for the business. Try out a few new products initially and adapt as you determine what resonates most with your customers. 
  1. Analyze impact. As you pilot test new products, services and processes, evaluate how effectively they’re helping your business reach its goals. Ask questions like:
  • What did this initiative cost us?
  • What was the return in revenue, cost savings, or efficiency?
  • If it was successful, are there other similar actions we can take to increase the benefit?

The answers will help you decide whether you will keep the changes you’ve made. For example, perhaps you invested in your website to expand some of your company’s ecommerce offerings. But that change may have generated sales if your business had to close or operate at reduced capacity. If so, you may wish to not only keep the ecommerce offerings you added but expand this initiative to drive even more sales.

By analyzing emerging opportunities and customer needs, strategically planning how your business can respond, and testing new offerings, you can find opportunity even in difficult or uncertain times. When you find successful additions to your operating model, consider making them permanent. Your business may not look like it used to, but the ultimate outcome in increased revenue and savings could make you happy you pivoted.

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To access additional financial education resources for entrepreneurs, visit our Financial Education Center.

 

Disclosures

[i] Vistage, May 2020. https://www.vistage.com/research-center/business-financials/economic-trends/20200527-small-business-confidence-wsj-vistage/

[iii] Mercer, https://www.mercer.us/content/dam/mercer/attachments/north-america/us/us-2020-flex-working-survey-results-infographic.pdf 

© 2021 M&T Bank Corporation and its subsidiaries. All Rights Reserved.

This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. Please consult with the professionals of your choice to discuss your situation.

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