Everyone will agree that 2020 has been an unimaginable year. It feels like yesterday when we were gearing up for 2020 after the New Year celebrations and some random news items or tweets started appearing about a virus in Wuhan. Small businesses like mine were, however, focused on making the most of the last quarter, fairly oblivious of a force that was about to fundamentally shake-up our lives.

Keeping aside all the pain, hardships, losses that people have suffered the world over, the pandemic is trying to teach us quite a bit about life, business and sustainability, the possible future, and how to safely work through the challenges.

 

When I say small businesses, I mean small not the ones employing 100+ people or having a turnover of INR 50 crores. Because what I am going to discuss is largely for the small business owners.

In this article, I am going to share with you my 5 takeaways for small businesses for the future. Some of them might resonate with you and others not depending on your type of business but the bottom line is that the Covid-19 pandemic has thrust an urgent need to transform from the ground up.

We must break away from all the old structures, demolish our past beliefs, and make way for the new.

Just like a tree that loses branches and dead leaves in the Autumn, I will rebuild new branches and leaves. I will rebuild and maintain only what bears me fruits. – Mitta Xinindlu

1. Technology Adoption using SaaS

Technology has been around for decades and its importance need not be stated. However, the speed of adoption has been different in small, medium, and large businesses. Remember technology is not an expense, it is an investment and should be afforded a lateral well-rounded view not a linear one. That is the main reason for the slow adoption of technology in small businesses. It is often viewed as a luxury or cost. Well, it is a “need” now. 

Software as a service (or SaaS) is using a software application over the Internet without installing it on any local workstation, desktop, or laptop. There is no need to invest in servers, other hardware, or hire trained database administrators, etc. to manage it for your business. The application is cloud-based and you pay like a subscription-based on users. For example, there is Google Apps, Slack which has merged with Salesforce, Hubspot, Zoho.

SaaS is a good option for small businesses as it allows us to concentrate resources on our core activities instead of server administration and data backup.

One of my customers has adopted Zoho for their order processing and managing payables and receivables. He has single-handedly set it up over a weekend and now operates it regularly. He is happy with the software and the ability to access it from anywhere. The tracking system is efficient and can be managed by one person if required.

Tally has also ramped up with their cloud solution. Google has also come up with an improved version of Google Suite. It is cost-effective and easy to use with a ton of features and applications. You do not have to use everything. Just pick the ones that serve your current needs and keep expanding in the future. It is scalable.

Protip

Stop depending on spreadsheets and physical notebooks or registers. Move to simple SaaS solutions. It does not take much to configure affordable software like Tally and use it for inventory management and accounting. If I can do it, so can you.

2. Continuous Innovation in Everything

Innovation in small businesses is not about creating a reusable rocket like the ones built by SpaceX. The word can be read as modernization, advancement, improvement in everything that you do within your business.

Steven Jeffes said innovation is the unrelenting drive to break the status quo and develop anew where few others have dared to go.

I used to be a big believer in routine. Why should we disturb something that is working fine? Well, what did the pandemic do? It just came unannounced and uprooted a lot of things that were working fine and caught many of us unaware. It practically forced change by shoving it down our throats. And there is no guarantee that it will not happen again.

So now my daily job is to continuously find faults in the way we do things and try to tweak it and make it more efficient. Believe me when I say that it is a constructive approach. I would rather break and rebuild proactively instead of being forced to rebuild after someone else has broken what I had built. This kind of approach also keeps us on our toes ensuring that we are on top of things. Do not let the moss gather, keep the stone rolling.

Protip

You can make a document like a preventive maintenance plan except instead of machines, record all the processes and major sub-processes that take place within your company and with the outside world.

Analyze them periodically and brainstorm either with your employees or other business associates/ vendors/ customers, and members of your trade association to widen your horizon. Try to find ways in which you can simplify them and automate whatever you can. You will see the difference in due course of time.

3. Risk Assessment and Preparedness

Risk is an inherent part of our lives and business. There is a possibility of something adverse happening in everything that we do. We cannot avoid it but we can prepare for some of the risks by intentionally seeking them. It can help us gain a stronger position to respond and react. Small businesses are particularly weak in this aspect. They are more reactive to risks than proactive. It is time to change that.

In ISO certification, risk assessment is a routine activity. You can document all the processes of your business and identify what kind of risks and hazards can occur.

For example: If you have people carrying material on the shop floor, there is a risk of slipping and falling. You can inform them with visual sign cards and train them verbally to be careful. You can even mark gangways with yellow borders to indicate the areas for walking.

Every risk or hazard must be rated as highly likely, likely, or least likely. This list will help you immediately act on the highly likely issues and move down to the least likely ones. This again is a periodic process because business is always in a state of flux. Things keep on changing.

The objective of risk assessment is to draw up a disaster or risk preparedness document which indicates what should be done when and by whom well in advance.  

Protip

Go for ISO certification of your business to organize and standardize your functions. The investment (which is not large) gives continuous returns over time in the form of mistake-proofing your systems, increasing transparency, and strengthening communication between you and your team.

4. Eye on the Basics

As you go about adopting technology and assessing business risks do not forget to keep an eye on the basics of your business.

Cashflow

Monitor your cash flow daily like a ritual. If you have adequate liquidity, you can survive any challenges. Create a simple dashboard that helps you watch your position every day. You can take the help of your accountant or CA to make the format and then set up a routine on how to update the data.

There was a time in our small business when we did not maintain a regular cash flow statement. Suddenly, we realized there was a huge gap in receivables and payables. It took us months to streamline things and we learned the lesson the hard way.

Even if you do lesser sales but get paid on time, you are in a better position than those who have huge outstanding both in receivables and payables. 

Outsource

Many small businesses also consider it an achievement that they are doing everything in-house. Learn to outsource. Cut down your flab. If someone else has a setup that can do your repetitive activity with better efficiency, send that job outside. Use your workers and staff to do the critical activities, the true value-added stuff.

Aim to create a strong vendor network. Work with multiple companies instead of sticking to the same “Shree Sai CNC Works” for the next 25 years. Have multiple vendors where you can get the same things done or procure the same components. Spread the share of the business to each one so that you have a steady supply chain. This will also come up when you do a risk assessment. Having multiple vendors gives you better market insight.  

Inventory Control

Every management article, book, lecture, or case does not fail to highlight the importance of inventory in the business. It is one place where your funds get blocked. The more inventory turns you have the more efficient you are.

Adopting technology will help you to create efficient inventory management systems and give you proper visibility of goods movement and the non-moving stock.

The concepts of safety stock, reorder level are not meant for management classes and notes. They must be implemented and communicated to all in a business using visual aids.

5. Invest in your Well-being

Learn to adapt. Fast. Try to be disruptive in the way you work. Try new things, different ways of working, and see how things improve. If there is one personal lesson that I have gained from this pandemic then it is about transforming yourself continuously and surprising your older self with the newly improved resilient one.

Resilience can be built or developed. It depends on our attitude to react at any disruption – from the smallest to a global event like this pandemic.

Small businesses have a greater need to be resilient both financially and operationally because banks and institutions do not come to our support as they would for a large enterprise.

My idea of being resilient is to become nimble and not BIG such that moving in any direction becomes a challenge. Small businesses can swiftly pivot to remain viable.

There are two ways of growing

? either you grow in size like having more sales volume and turnover or

? grow by diversifying into two smaller separate parts (something like not putting all your eggs in one basket)

Quick example: Suppose you have rupees 10 lakhs. You can buy one big car or two small ones or even a small one and a scooter while saving some amount. If the big car breaks down, you are stuck. If one of the small ones breaks, you can send it to the garage to fix it while using the other one to remain mobile. Another view – you can use one of the small cars and allow another family member to use the other and both become productive. Now swap the car example with two small businesses. Am I making a point?

A key factor in well-being which I believe in is to become a little austere in everything that we do for ourselves or our business. There is a tendency to overspend and spread ourselves thinner in good times. Practice equanimity to manage through good and bad times alike.

Equanimity arises when we accept the way things are. - Jack Kornfield

The Future is Blinking

I have not talked about keeping your customers satisfied because that is imperative. You will be doing it whether you do anything else or not. The 5 takeaways that I have shared are finally meant to enhance customer service and satisfaction.

There are two ways in which we can react to an adverse situation. We can either crib and complain about the pandemic, or use it as an opportunity to renew ourselves and become a better version of what we were. We will not be presented with such breaks every day. I will recommend you make wise use of this calamity to turn the tables on the pandemic.

What you need is to become adaptable, do technology-driven agile work, having diversified small and efficient businesses that are modular and portable.

If you are going to let this opportunity (or the threat depends on how you see it) go to waste by remaining unmoved or unchanged, then you are missing a chance to grow, rejuvenate and thrive. Sooner or later the others will thrust change upon you and you will remain unprepared or become extinct.

It is time to radically change the way you do your business. Are you ready?

Socrates said the secret of change is to focus all your energy not on fighting the old but building on the new.

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Dr Ipshita Basu Guha is owner of SVASTI PACKAGING - a corrugated carton manufacturing small business and Founder at DataInvestigata - a small data-driven content development business engaging with small businesses. 

Follow Ipshita's blog on her website(https://www.datainvestigata.com/blog) or Medium (https://ipshitaguha.medium.com)