In the U.S alone, 3.3 million small businesses plummeted into administration in 2020. As pandemic-driven pressures pushed many startup leaders to the edge, it’s no surprise that small business recovery has been described as a bumpy road by both the corporate and e-commerce industry.
As we step into a new era of small business management, dominated by online playing fields, social media promotion and a globally connected demographic, the entrepreneurs of today must have a thick skin and a strategic business plan if they are going to survive.
Read on as we delve into the benefits of shifting the business mindset from a fixed to a growth approach and divulge seven simple steps startup leaders can take to improve their post-pandemic recovery by solely changing the way they think.
The Challenges Of Running A Small Business In 2022
There are many challenges associated with small business management in 2022. From inflation to supply chain disruptions, startup leaders are facing one battle after another in a post-pandemic landscape.
With a push for digitalisation quickly transforming the corporate world, more start-up businesses than ever before have taken the leap and started competing for demographic engagement. In fact, 4.4 million new startup ventures were recorded in 2020 alone, as online entrepreneurship became more accessible to business leaders with smaller budgets and a keen eye for digital promotion.
In response, the startup landscape has grown by over a third since the first global lockdown. With more tech-savvy individuals turning their side hustle into their primary source of income, increased competition across a number of sectors has thrown obstacles in the way of startup success.
Some of the greatest challenges small businesses face post-pandemic are cash flow shortages, inflation costs, supply chain issues and a shrinking labour force.
(Image Source: CNBC)
As you can see above, in Q3 & Q4 of 2021, over a third of all small business owners faced revenue-based challenges, while a further 23% faced the repercussions of inflation rising at the top end of the year.
Tackling Inflation In 2022
After the UK inflation rate rose to 7% in March 2022, a number of small businesses saw their highest price hike since 1992.
In response, a whopping 60% of all small business leaders in a recent Business.org survey expressed their concerns about financial hardship in the wake of price rises and increased e-commerce competition.
While the pandemic already affected business revenue success, startup leaders with little to no backup funding are now struggling to keep their heads above the water.
(Image Source: Trade Finance Global)
For example, 92% of small businesses saw their expenses increase during the pandemic alone. Now just under a fifth of entrepreneurs predict that inflation will increase their costs by over 50%.
From hiring costs to supply chain expenses, the effects of inflation continue to pose a challenge to successful small business management. In fact, a number of entrepreneurs are choosing to simply throw in the towel as company funds run low.
The Effects Of A Global Labour Shortage
Another major challenge faced by small businesses in 2022 is a global labour shortage. As we jump into a post-pandemic skill drain, startups are fighting harder than ever before to acquire business talent.
“The fact there are fewer people available to cover the high demand specifically within white-collar expert STEM roles is becoming an immense problem for companies,” claims SThree CEO Timo Lehne, director of the popular recruitment company.
After hitting a new job vacancy record of 1,295,000 positions unaccounted for from February to April 2022, startup leaders are battling to fill skill gaps.
While this has been a trying time for many, a number of smart entrepreneurs have turned to the gig economy for answers. Opening startups up to a global talent pool on a freelance basis, the gig economy has provided small business leaders with a low-cost solution to the nationwide labour shortage.
As post-pandemic challenges teach business owners to approach obstacles with new creative perspectives, the power of nurturing a growth mindset could be the key to seeing success in a modern-day startup landscape.
Read on as we delve into the importance of a growth mindset when building a business venture and explore how entrepreneurs can change the way they think to improve industry success.
Why Is Mindset So Important?
Maintaining a small business in a post-pandemic landscape requires resilience. While many entrepreneurs focus on perfecting skills in customer service, sales, marketing and financial management, they often forget that nurturing a growth mindset is also a key ability required in a successful company strategy.
Developing a positive business mindset as the venture expands enables a startup leader to constantly improve and flourish. Developing a growth mindset gives an entrepreneur strength to face challenges, and push through setbacks while being open to learning new things.
In a post-Covid playing field, business leaders have learnt that company policies and proceedings can change in a matter of seconds. The key to success in 2022 is adaptability. From evolving social media trends to global lockdowns, entrepreneurs need to have an adaptable mindset and a resilient attitude when creating and modifying their business tactics.
Trial and error have become a right of passage in the business world, and with challenges such as inflation still looming, a smooth course to success is unlikely for aspiring startups. Not only can developing a growth mindset improve market outlook and influence business decisions, but 49% of employees in a growth mindset-focused company claim that their company is more likely to take risks and foster innovation.
A further third of employees interviewed in a recent Harvard Business Review article claimed that companies with a growth mindset see higher levels of staff commitment and productivity, increasing value production and churning out higher returns on investment.
If a growth mindset is prioritised by the company CEO, a positive, innovative approach to maintaining a venture trickles down from employees at the top to workers on the frontline.
Growth Mindset vs Fixed Mindset
Psychologist Carole Dweck first defined the term ‘Growth Mindset’ in 2015 as, “a state of mind where people believe that their most basic abilities can be developed through dedication and hard work—brains and talent are just the starting point. This view creates a love of learning and a resilience that is essential for great accomplishment.”
Comparing this form of thinking with an alternatively fixed counterpart that defines “people who believe their basic qualities, like their intelligence or talent, are simply fixed traits,” Dweck shone a light on the key to successful approaches to learning, leading and thriving within the business world.
(Image Source: Austin Learning Solutions)
When evaluating a business strategy with a fixed mindset approach compared to one with a growth mindset approach, there are a number of key differences we can identify.
Challenges: Those with a fixed mindset avoid challenges and often give up when facing an obstacle. When approaching a challenge with a growth mindset, however, a business leader utilises the resources in front of them to create a solution.
Criticism: Negative feedback is not favoured by those with a fixed mindset. In fact, an entrepreneur with a fixed mindset may even seem offended when criticised and will ignore advice from industry professionals. Company leaders with a growth mindset, however, embrace constructive criticism, allowing advice to influence future learning and strategic planning.
Failure: Business leaders with a fixed mindset view a company loss as a reason to give up on a venture. However, a company with growth-based values define failure as a chance to learn and improve, often flourishing despite setbacks.
Dweck believes that self-improvement is the key to successful leadership. “Most experts and great leaders agree that leaders are made, not born and that they are made through their own drive for learning and self-improvement,” she claims
How Can Entrepreneurs Change The Way They Think?
In order to achieve startup success in a post-pandemic landscape, entrepreneurs need to be thickskinned and prepared for any eventuality. While developing a growth mindset is not an overnight task, the journey towards successful leadership is only a few steps away.
Read on as we divulge seven mindset changes that startup leaders should make as they embark on their next venture. From learning to love failure to taking inspiration from competitors, Prioritising a growth-inspired entrepreneurial attitude paves a quick road to triumph.
1. Learn From Failure
Business leaders who are able to use failure as a stepping stone for future growth are 50% more likely to see continued company growth across a long timeframe.
Learning to view a company loss as an opportunity to develop new skills is the key to an entrepreneur becoming better at their craft. Failure should be viewed as a learning curve that a company leader can use to improve their strategic planning, market angle or training procedures. Instead of looking at a loss as a sign that success is not achievable, employers must take a step back and reflect on why they failed in their venture and take steps to make sure the same mistake is not made again.
Startups in particular must adapt and accept the notion of ‘failing’. With over 20% of startups seeing their venture fail in just the first year of business, entrepreneurs who are hungry for success need to be prepared to face setbacks on their journey to the top.
If a leader is able to take a loss on the chin and use it to empower company growth, they will not only become more resilient to future failures, but they are also more likely to take greater risks. In a startup landscape bursting with competition, taking well-calculated risks is the key to demographic victory. If a business leader is not afraid to step out of their comfort zone, they are more likely to become a trendsetter within their industry. Every market success starts with one company taking the first step forward.
2. Use A Challenge As An Opportunity
Entrepreneurs with a growth mindset, view a challenge as an opportunity to learn. While a business leader approaching a venture with a fixed mindset could view an obstacle as a reason to give up, leaders who are not afraid to push themselves out of their comfort zone find a way to work around a bump in the road.
On the back of Covid-19’s impact on the corporate sector and inflation’s effects on supply chain delays and market prices, 2022 has welcomed a number of obstacles for startup leaders who are fighting to see success.
After 60% of business leaders reported that supply chain disruptions severely affected the bottom line of their business growth in 2021, taking a different approach to bottom line delays in 2022, could be the key to thriving despite industry challenges.
(Image Source: IMF)
As supply chain disruptions continue to pose one of the greatest challenges to startups of today, business leaders with a growth mindset have learned to adapt in the face of adversity.
For example, smart entrepreneurs have turned supply chain challenges into an opportunity to seek local alternatives when sourcing materials and providing services. Not only does going local reduces the effects of supply chain delays but opting for smaller, eco-friendly alternatives have also sparked attention from a Gen Z and Millennial demographic, who are more likely to interact and pay more for sustainable products and services.
As you can see here, turning a challenge into an opportunity is a great way to keep a business thriving despite hurdles. In an uncertain digital playfield, entrepreneurs need to be able to adapt quickly and come up with solutions to the problem at hand, rather than simply giving up at the first sign of a struggle.
3. Prioritise The Journey, Not The Result
One of the key mistakes new entrepreneurs make on their journey to success is wanting too much too soon. While it is important to be continually looking forward during a business venture, victory is not always found in the end result.
Smart entrepreneurs must prioritise the journey to their end goal if they want to reach it. Often, the most successful companies are the ones that grow slowly, prioritising the quality of their services rather than the quantity they provide them. While it is important to have an end goal to strive towards, business leaders should set smaller, reachable KPIs along the way that promotes growth at a trackable rate on a manageable scale.
Not only can smaller goals build a streamlined path to an end result, but each milestone can be taken as a win for both the employer and their employees. Celebrating small achievements is important on the journey to the top. When a team receives contact gratification from completing smaller, value-adding tasks, they are more likely to feel important and appreciated within the workplace, contributing to higher levels of productivity and company growth.
The key here is to value the journey and enjoy the learning process when setting company goals. Prioritising a slower, more calculated business growth allows business leaders to make tweaks and improvements along the way and adapt a strategy in line with market trends.
4. Use Criticism As A Tool For Growth
There is nothing worse than an entrepreneur with an unbreakable ego. While it is important to be headstrong on a cutthroat playing field, those who cannot take criticism will quickly fall among industry competitors.
While criticism may sting, new research from Heaphy and Losada has found that leaders who receive the most constructive feedback are three times more likely to see growth success than those who refuse to take opinions from industry experts and their company clients.
Criticism is an important tool for growth. Entrepreneurs who want to do well within their niche should view constructive feedback as a chance to evaluate their current performance and a stepping stone for company improvement.
Better still, embracing criticism is a great way to avoid business complacency. A smart entrepreneur should always be looking for a reason to grow. Those who become comfortable become complacent, often straying off of the road to success. In order to stay ahead of the game, business leaders who want to keep improving should be consistently asking for feedback.
From digital feedback forms to reaching out to market experts for a second opinion, embracing the potential of alternative ideas provides a business leader with more opportunities for growth.
5. Step Outside Of The Box
Taking risks is often the key to success in the startup arena. While it is smart to evolve in line with the market trends dominating the business’ demographic, it is also important to stand out from the crowd, in a room full of competitors.
After the e-commerce industry saw a 35% rise in competition in 2020 alone, startup leaders must now prioritise a creative strategy moving forward. Harbouring a growth mindset, entrepreneurs are not afraid to step out of their comfort zone and become a trendsetter, rather than trend follower.
The key here is to head back to the drawing board and revamp that strategy. Using market trends to their advantage, company leaders can improve their chances of success by building on demographic trends while adding a creative twist to their product or service to make it differ from a competitor’s offer.
This could be in the form of marketing content, product design or even a change in company values. Offering the public something fresh is much more likely to grab their attention, than simply blending in with the crowd.
6. Take Inspiration From Your Competitors
While most entrepreneurs often fear their competitors, a simple switch in mindset could transform how a startup views its potential challengers.
Competition within the corporate world is inevitable. On the back of Covid-19’s digital shift, there are more startups than ever before. With 22,000 people a month now searching ‘How To Start A Business’ in the UK alone, it’s no surprise that it has become harder to see significant market success.
Rather than pitching against competitors, it’s time to start taking inspiration from them instead. The key here is to get to know your competition and most importantly have a strong understanding of the market. Entrepreneurs that identify the top players in the field can use their winning strategies to inspire new tactics, designs and values within their own company for increased chances of success amongst their niche demographic.
Better still, building strong B2B relationships with competitors can also increase a company’s growth potential. Not only can experts within both businesses collaborate and share their ideas for future expansion, but nurturing a relationship with a fellow competitor can enhance marketing efforts and allow a business to reach a wider demographic between two platforms.
7. Keep Looking Forward
Last but not least, it’s important to keep looking forward when starting a venture. While the current startup market may be a tough playing field to crack, entrepreneurs need to remain positive and confident if they are to see triumph amongst competitors.
In fact, business leaders with a positive mental attitude and a growth approach to company expansion are twice as likely to still be in business a year into embarking on the journey. The key here is to forget perfection and strive to meet small, achievable goals for continued gratification.
As we continue to monitor an ever-changing corporate and e-commerce landscape, the business mindset has never been more important. Those who can shift the way they think in order to improve business outlook are business leaders with true potential. The future of startup management is no longer fixed but constantly evolving.