If 2020 was a year of disruption and transition for small businesses, 2021 will be a year of continued evolution. To help you prepare, we talked with a handful of business experts about what to expect in 2021 and the near future. Here are five business trends and changes to look out for:
1. Remote work will be the new normal
The number of remote workers around the world has been steadily growing for years, but 2020 saw a steep increase. Currently, 42% of the U.S. workforce works from home full time, according to a 2020 report from Stanford University.
“I see a permanent move toward online and remote work,” said Michelle Diamond, the CEO of Elevate Diamond Strategy, an advisory firm that helps companies with growth strategy and execution.
“Many businesses have figured out how to run their companies successfully in this new paradigm. And because of this, the model will remain after COVID-19 and beyond.”
Remote work can be challenging when it comes to collaboration and communication, but the majority of remote workers appreciate the flexibility working from home provides. Plus, remote work means fewer overhead costs. Without an office space to pay for, you could build up your company savings or reinvest money back into your business by upgrading your software or increasing your digital marketing.
2. Digitization will accelerate
Many businesses were forced to digitize their operations and services this year to accommodate customers, but the bar will be even higher in 2021.
“Pivoting online is no longer just a good idea—it’s quite literally essential,” said Jeremy Moser, marketing expert and co-founder of uSERP, a company that helps businesses get brand mentions and backlinks.
Not only do customers expect businesses to have a greater online presence in 2021, they also expect a seamless digital experience. Sixty-eight percent of customers surveyed in Salesforce’s State of the Connected Customer report said COVID-19 raised their expectations for business’s digital capabilities. That’s especially true for millennials and Gen-Zers, the majority of whom prioritize convenience over brand, according to the report.
To create a convenient experience for your customers in 2021, it’s crucial to operate with a digital-first mentality and provide options. Depending on your business and industry, you could:
Offer mobile ordering and contactless delivery
Offer in-store and curbside pickup
Add a customer service chatbot to your website
Build an ecommerce platform for your products
Expand in-person payment options to include digital wallets like ApplePay
Offer virtual services
Create a mobile-friendly website
Develop an app for your business
Create a self-service account portal
Add an online scheduling system to your business’s website
Expand customer service assistance beyond phone calls
3. Empathy is the gold standard
After the stress and uncertainty of 2020, customers are looking for more than just quality products and services from businesses—they’re looking for compassion and empathy.
“If your brand lacks empathy, vision, and purpose, consumers won’t resonate with your goals, and will actively look for competitors,” said Moser.
In fact, customers are four times more likely to buy from and recommend a business that has a strong, identifiable purpose, according to The 2020 Zeno Strength of Purpose study. A business’s purpose includes its core values, business practices, customer service philosophy, and support for social causes.
To build trust with customers and create brand loyalty, you have to connect with their minds and hearts, Diamond said. “Customer connection is the only way businesses of the future will both survive and thrive.”
Forging that connection means demonstrating empathy, and demonstrating empathy comes down to addressing your customers’ needs and fears. To do that, you may have to tailor your products or services, reexamine your customer service policies, or use a more compassionate voice in your marketing materials.
4. Financial focus will shift from growth to profitability
As businesses recover from revenue losses and budget cuts in 2020, many business owners will take a more conservative approach to their financials in 2021.
“In previous years, much of my work with clients was centered on growth initiatives,” said Diane Davidson, the owner of Clever Fox Advisory, an independent financial advisory firm.
“Companies had the appetite to take on projects that did not immediately have a positive ROI. Now, they’re focusing on their operations and taking stock of where they can optimize processes to save money.”
Financial transformation projects, she said, can help reduce costs and keep cash flow steady. Think: automating administrative tasks, consolidating software systems, renegotiating vendor contracts, or outsourcing tedious services.
“Companies will also be more selective about which projects and programs they are going to undertake in 2021,” said Davidson. To stay nimble and profitable, you may have to pare down your offerings and focus only on the services or products generating the most revenue.
5. More consumers will prioritize shopping small
“One major trend since the pandemic and leading into 2021 is the drive of consumers to support small businesses and local economic growth,” Moser said.
After witnessing so many beloved local establishments struggle or close their doors in 2020, many customers have shifted their priorities. Now, 59% of consumers surveyed in Salesforce’s report would rather buy from a small business than a large corporation.
“Consumers are recognizing their ability to shift their own local economies in states, counties, and cities,” said Moser.
For business owners, capitalizing on this trend requires investing in local marketing and community growth, he added. In addition to boosting your social media presence with local hashtags and campaigns, consider donating to a local cause or participating in a virtual community fundraiser or event.
Get prepared now
Regardless of how your business fared in 2020, it’s critical to begin preparing for 2021. To set yourself up for success, set aside time to evaluate what worked well—and what didn’t—about your business model, financials, and customer experience.
And don’t be afraid to ask for help along the way. If you need to free up your cash flow or cushion your savings, consider a Fundbox line of credit. Applying is easy, and you can get a decision within minutes.
Looking for a solution to provide your customers with working capital? Learn how to become a Fundbox partner to utilize our platform for embedded finance.