With more than 4.4 million new businesses created in 2020 alone, post-pandemic entrepreneurs have officially become small fish in a global playground. As digitalisation continues to accelerate at record speed, it has never been easier to start an online enterprise and it has never been harder to succeed. Whether you’re looking to capitalise off of remote working trends or play your hand in the market’s most successful fields in a Covid-digital era, we cannot ignore the challenges that come with small business management.
As we access both the positives and negatives of managing a small business in a post-pandemic landscape, let’s delve deeper into the industry trends that are driving the future of the corporate sector and dissect the challenges ambitious entrepreneurs need to overcome in order to be successful amongst e-commerce giants.
The Pandemic’s Affect On The Corporate Sector
From lockdown to the labour market’s demise, the pandemic still continues to remould and rejig the corporate sector in 2022. With over 26% of Brits still working from home and business automation on the rise, it’s safe to say that Covid-19’s handiwork has altered the reality of managing a business in today’s climate.
Before we dive into managing a small business in this new reality, let’s have a closer look at the post-pandemic industry trends shaping the next few years of corporate change.
Managing The Labour Market
The labour market may be on its way back up, but unemployment still remains high across the globe in a post-pandemic landscape.
In fact, there were 1.42 million people unemployed between August-October 2021, compared to 1.37 million in January-March 2020. Heavily driven by private sector redundancy as a result of the pandemic’s pressures, a recent report by the House Of Commons suggested that the UK’s unemployment rate had not been as high since 2010.
(Image Source: Eurostat)
The continent’s labour market has been significantly affected by the repercussions of the Covid-19 pandemic. With an average unemployment rate of 7.1% across Europe in 2020, many workers fell victim to high redundancy rates and service closures as we locked down.
When analysing the unemployment trends that swept the nation, it’s clear that both the youngest and oldest workers appear to have felt the most significant impacts of the Covid-crisis. As the percentage of young adults who were unemployed in 2021Q1 rose by 10%, the result has seen a 50% increase in 19-24 years who have had to move back in with their parents as a result of job loss.
There are also clear indicators that unemployment throughout the pandemic was often industry-based. Around three-fifths of all pandemic-based unemployment can be attributed to the decline in the need for lower-skilled occupations, such as restaurant and hospitality industries, manufacturing, residential care and construction.
As the pandemic shut down the high street, those who could not work from home were either furloughed or simply didn’t. While service industries are now back on the rise in 2022 and predicted to boom in a post-covid landscape, the labour market effects have been significant for both employees and employers across the globe.
WFH On The Rise
Recent data from Upwork has revealed that 23% of corporate companies are still planning to work from home in 2022. Seeing a 10% increase in WFH trends in the last year alone, this digital shift is expected to transform the future of business management like never before.
In fact, the WFH shift is predicted to save global employers an average of $30 billion per day as remote working initiatives reduce in-office energy savings, tax and travel costs, while still raking in a profit.
Remote working comes with its benefits but also its challenges. While it may be more cost-effective for both the employer and the employee, the WFH shift has altered the way we work significantly. Rather than communicating with an in house team, office workers are climatising to a new digital alternative. From virtual Zoom meetings to a household office set-up, the isolation associated with WFH trends has posed a challenge to many.
In fact, a recent study by Finder found that 1 in 5 remote workers have reported feeling lonely since the onset of the pandemic. With a higher number of corporate workers suffering from anxiety and depression than ever before, employers have been faced with low levels of productivity, a lack of team engagement and a higher rate of absenteeism as a result of mental health concerns.
However, 65% of the global corporate workforce are still planning to stay remote after restrictions are lifted, with a further half of them suggesting that they would look for another position rather than returning to the office. While remote office welfare still remains an issue for new employers, the access to a global talent force and reduced inhouse costs seem to be driving this trend for the long haul.
A Technological Revolution
As Covid-19 locked the corporate sector down, technology opened it back up, enabling a multitude of new automated possibilities for a post-covid landscape. In fact, since the beginning of lockdown, WFH tech has been on the rise, with 75% of remote employees reporting that they used Zoom, Slack or Microsoft Teams during their home office transition.
(Image Source: Statista)
As you can see here, Microsoft saw a download increase of 20 million active users from 2019-to 2020 alone. As more small businesses swap the office for the couch, this is just one of the digital tools business leaders are using to revolutionise the post-pandemic work environment.
Enter augmented reality, the billion-dollar industry that is reshaping the future of the corporate landscape. Defined as an immersive aid that can improve employee efficiency, enhance virtual meetings and assist remote onboarding processes, it’s no surprise that AI-infused AR/VR technology is being introduced into the post-pandemic workplace.
While VR/AR infused technology can be costly, experts suggest that the return on investment is well worth the expenditure. If you don’t believe us, here are some of the benefits business leaders could see when investing in immersive tech.
- Improved Engagement: Those who learn by doing will continue to benefit from AR devices. Providing the opportunity to interact with a hands-on learning environment will encourage employees to engage with their position from home.
- Cost-Effective Onboarding: AR equipment may be expensive, but this reusable aid enables remote employees to receive an immersive onboarding experience that saves the company money on costly seminars and outsourced training programmes.
- Automated Problem Solving: AR technology is extremely adaptable and can aid employee problem-solving in a number of industries. Enabling a hands-on learning experience, employees can automate their learning and use virtual examples to build their confidence within the workplace.
In fact, two-thirds of senior executives have revealed that they have plans to invest in new forms of corporate automation post-Covid.
Across both the public and private sector, industry leaders are using a number of different automated technologies to address surges in demand and a reduced in house workforce post-pandemic. From manufacturing to call centres, working environments with large levels of human interaction are set to see the fastest acceleration in the adoption of AI-infused automation.
This shift in automated service can be attributed directly to the e-commerce boom. As demand increases, both e-commerce giants and small business owners are investing in automated aids to improve business efficiency
The Rise Of E-Commerce
One of the largest industry trends that have been influencing the future of small business management is the rise of e-commerce. In a post-pandemic landscape, the success of e-commerce based-business has never been better, in response to a significant online shift.
As the world went into lockdown, some of the globe’s largest commerce chains handed in the towel as high street footfalls declined rapidly. One notable retailer that closed its doors was Topshop, the fashion brand that was once part of the Arcadia group. Bought by the popular e-commerce retailer ASOS in a $364 million deal, the brick and mortar store was one of many that struggled to survive the digital shift.
In fact, Covid-19 only aided the expansion of e-commerce based retail. By February 2021, over 35% of the retail market was attributed to e-commerce outlets, and that number has only grown since.
(Image Source: McKinsey)
As you can see here, global e-commerce has grown 2-5 times faster than before the pandemic, with both the UK and China seeing the largest difference in overall retail sales.
The High Street’s Demise
If we take a closer look at the traditional high street’s demise, it’s clear that Covid-19 has only accelerated its impending decline. As we become a digitally connected population, the elevation in smartphone use across the world has enhanced the demand to be able to purchase global products from the comfort of your couch.
As the effects of the pandemic pushed for online retailers to step up their game at the beginning of 2021, more than 8,700 chain stores closed in the UK alone. With WFH on the rise and numerous lockdowns looming, commuter traffic contributed significantly to the 4.3% decline in brick and mortar footfall.
Speaking about the potential of a permanent high street shift, CEO of the British Property Federation, Melanie Leech described the demise as “Inevitable”, predicting that the near future could see a 50% reduction in high street retail outlets.
“Because the high street is changing, we will need less physical retail going forward,” she claims. “We will see empty premises because not all businesses will make it through. I can’t put a number on that, but that trend was happening anyway and will be vastly accelerated by the impact of coronavirus.”
A Small Fish In A Global Playground
For small business managers or entrepreneurs looking to test their chances with a startup, the demographic for the online retail scene is wide and always expanding. With a worldwide network of potential consumers, e-commerce’s success could carry a number of benefits for small business owners.
However, small businesses looking to break their way into the e-commerce sector need to remember that they are little fish in a pond full of sharks. As online giants continue to battle for competitive niche group engagement, small businesses will struggle to keep up without a sufficient following.
Prioritising marketing efforts, brand awareness and consumer retention is the way forward for small business success. It’s time to monopolise off of the leading social platforms and focus on that retargeting strategy if you want to see your e-commerce demographic grow.
Managing A Small Business Post Pandemic
Did you know that over 5.4 million applications for small business ventures were filed in 2021, despite the ongoing pressure from the pandemic? According to the Census Bureau, that’s up from 4.3 million in 2020.
As the opportunity for small business success widens, new digital aids and an accessible online audience have been the driving factors for new startup ventures. As the WFH population continues to expand and the unemployment rate fluctuates, an uncertain time for many has become an opportunity window for others.
Covid-19 has given entrepreneurs both time and resources to play with when managing a small business. From access to a larger talent pool in the wake of Covid-based redundancy to a thriving gig economy facilitating small budget start-ups, starting a small business during a global pandemic might not be the craziest idea you’ve heard today.
Let’s delve into the benefits of managing a business in a post-pandemic landscape and address some of the challenges of small business management that entrepreneurs need to overcome if they want to see success.
According to a Small Business Index report, over 77% of new entrepreneurs are optimistic when assessing the future of their small businesses. In a post-pandemic landscape, small business ventures may be risky, however, the report suggests that entrepreneurs are prepared to put themselves on the line while venture costs are low.
Driven by the success of new forms of social media promotion, global accessibility and large returns on startup investments, there are numerous positives associated with small business management post-pandemic. Let’s have a closer look at how Covid-19 improved the small business scene.
A Global Audience
While lockdown may have closed down the high street, it also brought us a digital revolution. As millions retreated to their couch with their smartphone in hand, social media-based commerce boomed during the height of the pandemic. As numerous small businesses began to promote themselves across highly populated social channels such as TikTok and Instagram, they opened their doors up to a new global demographic that was not available on the high street.
Post-pandemic, a growing global audience has been a driving factor for small business management success. Using social media to their advantage, small business owners are able to target the Gen Z and Millennial generation, who are currently leading the future of E-commerce.
For example, the pandemic shifted 55% of 9 to 24-year-olds onto their phone for more than 5 hours a day. As new global trends quickly surface on popular platforms, entrepreneurs now have the chance to jump on to popular content fads and increase their chances of going viral online, in return boosting brand awareness and small business success.
Top Talent At Your Fingertips
As the unemployment rate post-pandemic still remains high, it could be time for small business owners to start hiring during WFH while the talent pool is at their fingertips. With more skilled workers looking for an opportunity, small business owners have the power to pick and chose those with the right skills for the job.
The pandemic has also altered working trends, making remote and freelance positions more popular than ever before. New entrepreneurs who are navigating an uncertain future are now able to prioritise flexible hiring and gig work in order to save both money and their backs if business ventures fall under.
Costs are Low And Return Is High
While the age-old statement of “it takes money to make money” still rings true today, experts are suggesting that investment funding has fallen as a result of the pandemic.
In fact, 52% of post-pandemic small business owners launched new ventures in 2021 with less than $10,000 in funding. Lower costs could be attributed to uncertain times and gaps within the post-pandemic market, or more likely a new digital-first approach.
Managing a digital-first business is low cost, with an opportunity for a sizable return. As popular platforms such as TikTok, with over a billion users, make it possible for brands to create organic content for a shot at going viral, creativity has become the new currency for small business owners.
Managing a small business online also saves in house costs such as office rent, equipment and energy, which can be redirected into new tech investments that are improving small business efficiency. With a remote workforce at hand, over a quarter of small business owners have now chosen to go purely digital in order to reduce outgoings and jump on top of the post-pandemic digital shift.
The Challenges Of Small Business Management Post-Pandemic
While the Covid-driven digital shift is significantly revolutionising small business management opportunities, at least three-quarters of small business owners have reported a drop in revenue as a result of the pandemic’s repercussions.
With inflation costs on the rise and supply chain issues still hitting local manufacturers hard, there are some significant challenges ahead for small business owners are we head out of the pandemic.
(Image Source: CNBC)
Inflation On The Rise
On the back of Covid-19’s impact on both the economy and the labour market, it’s no surprise that inflation has risen as a result. For small business owners, inflation poses a challenge for entrepreneurs who are looking to make a profit post-pandemic.
The dilemma small business managers are struggling with is whether to increase their prices alongside trending competitors or take a hit in profit in order to retain loyal customers.
3 in 5 small business owners have raised prices in 2021 alone according to a new report from Small Business Index. After the general product price index jumped up by 10% post-2020, entrepreneurs have had to decrease staff working hours and apply for loan support in order to manage inflation’s damaging effects.
Employee turnover can be extremely damaging for small business owners. In fact, a report from the CAP suggests that turnover can cost business owners up to 200% of the employee’s salary, hitting hard in an inflation-infused landscape.
As small business employees move on to larger opportunities as industries open their doors back up for new talent post-Covid, small businesses are left with all the costs and none of the benefits.
In order to manage employee retention during a post-pandemic corporate shift, small business leaders need to open up their line of communication. Allow employees to talk about their career goals and formulate a plan to help them grow within the company. Enhancing communication between your team will improve worker satisfaction and reduce employee turnover.
Long Term Supply Chain Issues
Supply chain issues have been a challenge for small business owners since the pandemic began. As both manufacturing and delivery times continue to change as the globe navigates an uncertain future, supply chain delays have had knock-on effects for independent businesses that require certain goods and materials for their trade.
69% of small business owners believe that supply chain issues have negatively impacted their bottom line production scale. Unlike popular competitors in their field, independent fashion, handmade design and product based retailers have seen a reduction in profits as they fail to meet e-commerce based demand.
Without sufficient funds to harvest bulk orders of expensive materials and employ an in-house manufacturing team, small business ventures have struggled to rival e-commerce giants within their niche. Relying on air cargo carriers and overseas manufacturers has had a knock-on effect on all aspects of the supply chain from the production process to the end sale. As international delivery lines improve in the wake of a post-lockdown future, there is hope on the horizon. However, small business owners will have to work twice as hard in order to catch up with their competitors.
An Uncertain Future
While the future remains uncertain for small business management in a post-covid era, entrepreneurs can feel positive about what the next decade of business holds.
As digitalisation continues to reduce business start-up costs, managing an online business has never been more accessible. While new global e-commerce demands may prevail, the future of small business management lies within the realms of creativity rather than niche authority. Utilising social media platforms to ramp up brand awareness is the key to a successful future, especially in the wake of the high street’s demise.
However, the post-pandemic era is still an unpredictable challenge for small business management within the corporate sector. As global labour markets continue to shift, both employee retention and remote working trends are on the minds of many entrepreneurs. In order to stay afloat during uncertain times, the key to success for small business owners is to be fast, flexible and formidable in the face of Covid-19.