Many businesses are unsure how to systematise their operations to scale their company without the headache. How does one prepare their business for the unexpected and create a lean, profitable machine? And what is holding back small, digital agencies from growth?
By 2024, small businesses could add up to 2.3 trillion dollars to the global GDP growth. However, recent historical events have drastically impacted small businesses.
The fall of small businesses
The COVID-19 pandemic, for instance, hit small businesses hard. Up to 96 per cent of all small businesses were affected by the pandemic, as 59 per cent of these companies had to lay off a substantial number of their employees.
In fact, nearly 30 per cent of small businesses closed their doors permanently due to the global pandemic. Globally, 20 per cent of women-led small businesses reported closing compared to 16 per cent of small businesses led by men. BIPOC-led small businesses were at least 50 per cent more likely to report permanent closures, reduced sales, and employee layoffs.
The rise in numbers
However, in 2021, the global small business closure rate fell from 24 per cent to 18 per cent. Just about 34 per cent of small businesses reported lower sales than a year ago, indicating the upward trajectory of small business sales.
In the United States, closure rates fell to only 16 per cent. The future for small businesses thus looks brighter than the recent difficult years. For instance, Americans created 2.8 billion more online micro-businesses in 2020 than in 2019. Moreover, 67 per cent of these micro-businesses plan to expand into full-time operations.
Likewise, 50 per cent of small businesses are focused on digital agency growth and rebuilding in this more promising time for the global economy. However, 36 per cent of small businesses report still being in survival mode due to the pandemic.
20 per cent of small businesses have drastically altered their business models since the pandemic, and 62 per cent of businesses that shifted entirely to digital business models plan to maintain and expand options moving forward.
Also Read: COVID-19 and the wave of business digitalisation
45 per cent of small businesses are ready to start planning for a digital future, while 28 per cent of small businesses are already working on this integration into the digital sphere.
Consistency in growth
Businesses should prepare for the unexpected in these optimistic yet ever-changing times. Many small business owners take full responsibility for nearly every aspect of their business, including 75 per cent of sales, 75 per cent of client management, 72 per cent of hiring and onboarding training, 72 per cent of overall team performance, and 50 per cent of the ultimate delivery and results.
Consequently, more than half of small business owners are reported to be too terrified to leave their businesses for time off or a vacation. In fact, three out of four small business owners are not prepared for their second-in-command to take a temporary leave.
And most small businesses are not prepared for unexpected challenges or unexpected successes. More than 96 per cent of small businesses are unprepared to handle a sudden influx of leads. Similarly, more than 80 per cent of small businesses are not prepared to handle one huge new client, and 79 per cent are not prepared to get as little as ten new clients in a single week.
Therefore, now is the time to build a resilient and scalable business to handle the fluctuation of the consumer market and optimise revenue. Small businesses can create a complete and optimised business system to easily delegate needs. This system allows businesses to track the performance of each pillar to identify strengths and gaps within the workplace.
These pillars include workflow, tech stack, documents, training, and metrics. As a result, businesses can easily see the repeatable steps to track progress, streamline processes to run more efficiently, support assets so they do not have to start from scratch every time, enable people to perform each process and reach levels of excellence, and measure the efficacy of each of the processes.
Businesses wondering where they stand compared to their competition can check the varying opportunity matrixes. These show how 400-plus agencies ranging from US$250 thousand to US$7 million in annual revenue performed across the five pillars and seven functions of their business.
The seven functions include sales process, client onboarding, production, client management, reporting, hiring process, and team onboarding. Identify gaps in your business to yield greater success.
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