To mark the fifth edition of the “Small and Medium Business Trends” report*, Salesforce analyzed the responses of more than 2,500 SMB owners and leaders around the world with the aim to collect insights on the biggest factors influencing this sector of business.
Focusing on areas such as local community support, how SMBs are deepening trust, the role of technology, and what the future looks like after these rollercoaster years of the pandemic, the report shares a snapshot of entrepreneurial vision and inspiration.
For almost two years now, SMB’s have been at the forefront of tackling tumultuous change. Owners and leaders have been guiding their teams and companies through a three-pronged attack of an ongoing health crisis, large-scale societal change, and an oftentimes volatile economy. While we’ve all seen many businesses, both small and big, suffer, others have jumped upon entrepreneurial opportunities and are now flourishing – representing a new era of innovation in business.
The report identifies four key trends among SMBs:
- Communities and governments have stepped up support
- Customer and employee engagement is the number one priority
- SMBs need to embrace digitalization
- The pandemic has brought about long term changes that are here to stay
Here, we take a look at how communities and governments have contributed to SMB survival and why putting customers and employees first has to be the new standard in business approaches.
Communities are stepping up
While SMBs have survived these rollercoaster years undoubtedly to a lot of determination within management teams, there’s no doubt that the communities in which they operate have also played a role. Through lockdowns and curfews, companies globally have found themselves faced with resource shortages and challenges to maintain revenue streams. Two-thirds of SMB leaders say that community support during this time has been important to their survival – more than one in ten say it’s been absolutely critical.
The retail and consumer goods industry, in particular, has relied upon outside support – and that can’t really come as a surprise in the age of stay-at-home orders.
With government support, many SMBs have been able to reorganise their business approach in order to continue routine actions, such as purchasing supplies and paying employees. Financial aid, such as furlough schemes, has meant that SMBs were able to cut overheads and continue paying employees. According to Salesforce’s data, most SMBs applied for financial aid during the pandemic, medium-sized companies were the most likely to. More than half of SMB aid applicants received help, 73% for small businesses and 69% for small companies. Private grants were also awarded to just over half of those who applied as well.
Customer and employee engagement take priority
While communities and governments have stepped up to support SMBs, the expectations of businesses have also stepped up. Now, companies are expected to provide more for their communities and consumers and create better conditions and a more positive work-life balance for their employees – both of which were fundamental in keeping businesses afloat during this experience. Themes such as improving relations, increasing engagement, ensuring safety and promoting workplace satisfaction are key concepts highlighted in Salesforce’s report.
In the race to adapt to quickly-changing conditions, many SMBs had to make drastic HR changes at a fast pace. While some companies reduced working hours or cut back the workforce, nearly one in five SMBs furloughed employees during the initial stages of the pandemic.
Perhaps most remarkably is the discovery that two in five SMBs have provided flexible working arrangements to employees during the pandemic. Growing businesses are more likely to have offered employees flexibility, compared to stagnant/declining businesses. It will be interesting to see if flexible and hybrid working continues to be a defining trend of SMBs globally.
Changes in work culture have inevitable arisen as part of necessity, but also due to changing expectations from employees themselves. The survey found that today, employee’s top 5 expectations are:
- Having a flexible schedule
- Wearing a mask at work
- Daily sanitation of workspaces
- Social distancing enforced at work
- The ability to work remotely
These insights clearly show that employers need to now carefully consider safety at work, as well as employee mental wellbeing, and provide solutions that enable them to create a work-life balance that makes sense to them. As many employees worked from home or in hybrid models during the worst days of the pandemic, many are now accustomed to the benefits of remote and flexible working and are hesitant to return to an office, particularly without guarantees of safety.
Not only have employees changed their expectations and focus, but it appears that customers have greater expectations than ever before.
90% of customers say how a company acts during a crisis demonstrates its trustworthiness.
Further, according to Salesforce’s “State of the Connected Customer” report, 83% of customers expect to engage with someone immediately when contacting a company — up from 78% in 2019. SMBs have been adopting new practices to meet these expectations, Nearly half (47%) are more careful about their customer communications, and 42% have expanded the ways customers can reach them – all a sign of the new importance of customer satisfaction. They have done so by investing in technology such as CRM and e-commerce to be able to connect with their customers on all available digital channels.
While most companies have made innovative adjustments to address these challenges, there’s still lots of work to be done. Not only do SMBs have to live up to pre-pandemic standards of innovation, keeping up with demand and engaging with customers, but now they also have to do so across a variety of channels, with an increased focus on safety, and do so at lightning speed.
Lastly, as our world becomes increasingly digitalized, SMBs have to make sure they stay ahead of the wave of digital transformation to keep themselves viable. The ecommerce sector is advancing towards online models the most spectacularly, with 71% of SMB leaders saying their customers expect online transactions. Now, 63% of SMBs have an online presence – a 31% increase within the past year.
Embracing digital approaches
It’s clear the world has changed over the past couple of years and SMBs need to remain agile in order to keep up with the pace and be able to grow. However, change can also be the inspiration for new innovation and let new businesses thrive. Many SMBs are doing so through embracing digital approaches and inwriting pandemic-induced changes as new long-term business approaches.
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*The survey was conducted online by The Harris Poll on behalf of Salesforce between June 21 and July 12, 2021, among 2,534 SMB owners and leaders in North America, Latin America, South America, Europe, and Asia Pacific. Respondents are above 18 years old, full-time, part-time, or self-employed, and owners or senior executives at businesses with 2–200 employees and annual revenue of less than $1 billion U.S. or the local equivalent.