To ensure survival in the midst of the current health and economic crisis, small businesses of all kinds have been changing their operating hours, revamping pricing structures and adding new payment methods. The very nature of a small business means that it’s business model can become adaptable. We’ve observed a number of clear trends in the way that business owners have propelled their companies through the pandemic and there’s some valuable insight for entrepreneurs who are looking for insight into their own business models.
- NEW ONLINE DELIVERY CHANNELS
By far, the most common recent business model pivot has been the addition of a new online delivery channel (think: selling through an online marketplace or taking orders via your website). With the pandemic, businesses have had to act fast. They’ve had to scramble to get some sort of system that shoppers could use to tell us what items they wanted without having to step into the store.
Instead of going it alone, many small businesses partner with online marketplaces and eCommerce services such as Shopify and Xero to sell their goods. Research by Shopify found that 30% of companies adding a new online delivery channel are using eCommerce software to do so. Ultimately, what matters most is getting your business online—how you do it is less important.
- NEW VIRTUAL SERVICES
Shopify’s survey found that two out of five small businesses are creating a new virtual service. For example, Virgin Active provides some online classes and many real estate agents provide a virtual home tour. Virtual services allow businesses to reposition their essential value proposition around changing customer needs.
Providing a virtual version of your service or product offerings can also enhance your existing business model by attracting new customers, such as those who live in a different city or town.
- NEW OFFLINE DELIVERY CHANNELS
Another popular business model pivot is the creation of a new offline delivery channel such as a phone-and-collect or home delivery system. Consumers have quickly discovered the convenience of pick-up and delivery services, and it’s likely to remain the new normal long after social distancing needs have eased. And while many small businesses have also started their own home delivery service, others choose to partner with third-party platforms to extend customer reach and streamline orders.
If a delivery platform such as Uber Eats or a local courier service help grow your business and significantly increase profits, it might be worth the high fees; otherwise, the costs could outweigh the benefits.
- NEW PRODUCT DESIGN
Many businesses are now also busy creating new products. Many of the companies with the means to develop new products, manufacture them, and bring them to market are taking the initiative to do so. In many cases, the businesses developing new products are part of industries hit hardest by pandemic-induced closures.
Take Chef’s Brigade, a small business that specialises in providing garments for restaurant staff and chefs. When the restaurant industry suddenly shuttered back in March, Chef’s Brigade pivoted to making face masks to compensate for lost revenue. This goes to show that you might only need to reconfigure your resources to fulfil new opportunities.
- NEW CUSTOMERS
For companies whose existing customers can no longer purchase their product, there’s often no choice but to look for customers who can. By analysing your market and the consumer segments therein, you’ll be able to build a good picture of the new customer base you can attract. Be sure to follow our Facebook page or LinkedIn page where we’ll be discussing ways to attract new customers in our next blog segment.
Do you need more information about the cloud accounting and payment channels most suited to your operation? You can book a call or appointment so that we can talk, obligation free, about your business needs, or send us an e-mail to get the conversation going.
