Five Keys to Small Business Growth in the New Year
National retailers experienced a 5.1 percent growth to close out the 2018 holiday sales season, earning $850 billion in revenue. These earnings reflect the highest growth in nearly six years and speaks to a rising consumer confidence. If you’re a small business owner in any sector, they’re encouraging numbers to bear as you reset in 2019. You might even be tempted to coast on this ascending tide of optimism to kickstart the new year. But that could be a mistake. Growth can be spurred on by disruptive forces in industry, and your ability to adapt and change accelerates as a result of crisis, not complacency. Roman Lentz, Chief Digital Transformation Officer at Heidelberg Cement, speaks to this effect:
“It would be a lie to say that a good crisis or a good disruption doesn’t help [change, and as a result, growth]. [i]f you honestly look at organizations that change the fastest, they’re the ones with their backs most strongly against the wall…”
What does this mean for your medical practice or event-planning firm that wants to achieve growth without having to face, or pay the price for, a crisis to do it? A readjustment in strategy, perhaps. Instead of making growth the end-all priority for these next months, plan for the longer game. Keep an eye out for the emerging trends or conversations in your sector, so that your business can adapt ably and flexibly and stay at the forefront of industry change.
For 2019, consider these five trends and strategies that continue to shape businesses and stimulate growth, and the ways you might address them in your business:
1. Power of a human-centered approach.
The process of design thinking, and the broader framework of human-centered design, was first popularized by the global design consultancy IDEO. Its impact continues to be far-reaching across brands and industries. Applying a human-centered approach to your marketing strategy, client services or user environment creation means to begin and end with your customers principally in mind. Seek to intimately understand their needs, identify the different kinds of frustrations they might be experiencing in your business sector and focus on solutions that holistically benefit them, not just your bottom line.
If you’re a principal at a dental practice, for example, you might begin to ask: What are the fears or negative feelings my patients often associate with dental care? How does the physical environment of my facility trigger or calm those feelings? Or, what could my patients find most frustrating about check-in processes on the day of arrival? And so forth, until a solution emerges from an ideation that is patient driven, patient centered and above all, patient beneficial.
Tangible growth could very well follow as a result of this kind of thinking and approach.
2. Consequences of a talent gap.
One challenge that continues to fester for small businesses is how to go about finding the right kind of talent for their particular mission and needs. The Q4 Small Business Index by MetLife & U.S. Chamber of Commerce reported that 67% of surveyed owners noted difficulty recruiting candidates with relevant skill sets, which forced them to take on additional workplace burdens themselves.
Refresh your strategy for attracting and retaining talent in the new year. It’s likely that the happier your employees are, the more productive they will be. Consider offering benefits like the option to work remotely or ongoing professional training and development, so that your staff will stay on the cutting edge of technological practices and transformations in your industry.
3. Value of corporate social responsibility.
The merits of corporate social responsibility (CSR) remain on an upward trend. As a business owner, your being accountable to broader community, ethical or environmental concerns can positively affect growth. Integrating social awareness into business practice can help forge deeper connections with your customers and employees. One recent study on CSR found that more than 90% of queried business students were willing to sacrifice a part of their salary to work for a socially responsible employer. As we learned, employee happiness and retention will go a long way toward productivity and growth.
Furthermore, by using design thinking to delve deeper into the neighborhoods and communities of your customers, you’ll be able to nurture brand loyalty and public trust, and improve your business’s reputation and access to funding. Established in 2004, our Popular Foundation invests in education, community development and financial literacy as an expression of corporate social responsibility and concern for the well-being of our customers and their communities.
4. Urgency of a cybersecurity strategy.
Whether it’s your financial accounting, record keeping or transactional system, you’ve likely migrated many features of your business onto a digital platform. That makes you susceptible to data breaches or ransomware attacks. Recent statistics show that nearly 43% of cyberattacks have been aimed at small businesses, resulting in annual losses of almost $80K, a devastating obstacle to growth.
It’s crucial to educate yourself and your employees in the ways hackers infiltrate your networks and systems — phishing, malware or spoofing are common tactics designed to mine personal and professional data. Though no one security solution provides a wholesale blanket against cyberattacks on your business, you can still use a combination of strategies and solutions to minimize their impact. The SBA offers a helpful list of cybersecurity tips and reminders, ranging from safeguarding your networks to creating backups of crucial information and data for retrieval. And for your payment systems, ensure that you have a comprehensive suite of fraud prevention services in place.
5. Necessity of the basics.
Despite all the year-end positive indicators, growth can still seem elusive against the realities of economic uncertainty and variability. Nevertheless, you can stay proactive in your management of business basics — timeliness of payments and receivables, health of your cash flow, sufficiency of inventory or availability of credit.
Aggressively staying on top of your sales and revenue patterns will help you figure out how or when to refresh marketing strategies, invest in new talent, trim expenses or establish a safety net of capital. Business growth is a consequence of revenue growth. Make sure you have surefire strategies in place to “sell more, sell to more and sell for more,” as Gordon Tredgold, founder and CEO of Leadership Principles encourages, so that you can maximize your revenue.
- Guta, Michael. “Retailers Saw a 5.1% Sales Growth in the US This Past Holiday Season, Report Says.” January 11, 2019. https://smallbiztrends.com.
- “Mastercard SpendingPulse: U.S. Retail Sales Grew 5.1 Percent This Holiday Season.” December 26, 2018. https://newsroom.mastercard.com/press-releases.
- “December 2018 Report: Small Business Optimism Index.” December 2018. https://www.nfib.com.
- Wallman, James. “Don’t Wait for a Crisis to Change Your Business.” January 7, 2019. https://www.ideo.com/blog.
- Hoover, Cole. “Human-Centered Design vs. Design-Thinking: How They’re Different and How to Use Them Together to Create Lasting Change.” October 4, 2018. https://blog.movingworlds.org.
- Lockwood, Thomas and Papke, Edgar. “How Intuit Used Design Thinking To Boost Sales By $10M In A Year.” October 31, 2017. https://www.fastcompany.com.
- “Small Business Optimism Remains High Amid Positive Economic Outlook.” Q4 2018. https://www.uschamber.com/sbindex/SBI_2018_Q4.pdf.
- Strauss, Steve. “Gigs, ghosts and apps: The top 3 small business trends on the rise in 2019.” January 9, 2019. https://www.usatoday.com.
- Hart, Brian. “Why Talent, Training and Technology Are the Keys to Sustainable Small Business Growth.” November 20, 2018. https://www.inc.com.
- Dixon, Rashan. “5 Business Trends That Will Continue to Rise in 2019.” December 6, 2018. https://www.entrepreneur.com.
- Haski-Leventhal, Debbie and Pournader, Mehrdokht. “Business students willing to sacrifice future salary for good corporate social responsibility: study.” February 21, 2017. https://theconversation.com.
- Thompson, Lisa. “Corporate Social Responsibility on Trend to Grow.” January 8, 2019. https://www.lexisnexis.com.
- “43% of Cyberattacks Target Small Businesses.” Score (blog). October 11, 2018. https://www.prnewswire.com.
- Guta, Michael. “Small Businesses Lose $80K on Average to Cybercrime Annually, Better Business Bureau says.” December 3, 2018. https://smallbiztrends.com.
- “5 Ways Your Business is Vulnerable to Cyber Attacks.” Futurism (blog). November 13, 2018. https://futurism.com.
- “Top Ten Cybersecurity Tips.” SBA (blog). https://www.sba.gov.
- Tredgold, Gordon. “Three Keys to Driving Business Growth.” September 30, 2017. https://www.inc.com.
The information mentioned in this article is for informational purposes only, is intended to provide general guidance and does not constitute legal or tax advice. Each person’s situation is unique and may materially differ from the information provided herein. You should seek the advice of a financial professional, tax consultant and/or legal counsel to address your specific needs before any financial or other commitments regarding the issues related to your situation are made. Popular Bank does not make any representations or warranties as to the content contained herein and disclaims any and all liability resulting from any use of or reliance on such content.