Small business trends you need to look out for in 2021
Consumer behavior and the way of doing business will be very different in 2021. A whole new set of business trends are emerging and small businesses can take advantage of these to emerge stronger than ever.
No business could have prepared for 2020. A lot of businesses were affected, especially small businesses, which were heavily hit. Our world changed drastically in a matter of weeks. As the world changed, so did consumer behavior.
The future is uncertain… But this uncertainty is at the very heart of human creativity.
– Ilya prigogine, Nobel Laureate
Today’s businesses, especially small businesses, have to be forward-looking and keep an eye out for emerging trends. There is a lot of uncertainty surrounding the economy as a whole going into 2021, but it doesn’t have to be that way. In this blog post, we discuss solid small business trends bound to take off in 2021
Small business trends for 2021:
- Businesses adopt automation
- Increased focus on cybersecurity
- Customers look for convenience
- More businesses move to a subscription model
- Skills will matter more than degrees
- Artificial intelligence is no longer just a buzzword
- The mental and physical health of employees will be prioritized
- Businesses move to a remote-first work culture
- Ad spend moves to digital media over traditional
Businesses adopt automation
Automation is a business trend that gathered traction during 2020. The days of drone deliveries and robot waiters are here. Many businesses have turned to robots and automation to reduce human-human interaction during the pandemic period. Human-machine interactions are going to stay and will become a part of our future.
Advantages of automation for small businesses:
- More efficient processes
- Reduce repetitive work
- Reduce human errors
- Optimized workforce allocation
While using a robot as a receptionist might seem like a far fetched idea for small businesses, there are several other ways small businesses can utilize automation. For example, small businesses can use payroll and finance software to keep track of their finances, pending payments, and employee remuneration. Assigning work is another area that requires special attention, especially in remote work – small businesses can utilize project management tools that simplify organizing tasks and keep the entire team updated on their progress.
Increased focus on cybersecurity
Most businesses have been forced to go remote, and thousands of employees have transitioned to work from home overnight – the standard firewall and office security settings are not there to protect employees working remotely. As online interactions increase, we are also witnessing an increase in cyberattacks such as hacking, phishing, and other threats.
The FBI has mentioned that they are witnessing a 400% increase in cybercrime reports during the Covid crisis.
Small businesses are especially vulnerable to cyber attacks as they may not have sufficient infrastructure, budget, or a dedicated team taking care of cybersecurity. Nearly one in three victims of cybercrime were small businesses, according to a report by Verizon. Cyberattacks can range from phishing, ransomware, hacking to data breaches. These can cause a wide range of problems to small businesses, such as financial loss and confidential information being stolen.
Small businesses must prioritize their cybersecurity and hire experts or consultants to have a basic plan in place. Employees must also be well trained to spot spam or phishing emails and must remain vigilant at all times.
Customers look for convenience
We are seeing a definite business trend where consumers are looking for convenience more than anything. These days, most people prefer browsing through a catalog of items on their mobile phones while sitting in their pajamas (the author is guilty too!). If you aren’t delivering products to your customers’ doorstep, they will most likely move to a competitor who’s doing that.
Home deliveries became the norm during the lockdowns; e-commerce is no longer an option for businesses but rather a necessity. Having a website and providing home deliveries is a must-have in the future. The website for a business might become more critical than the storefront in the coming years.
More businesses move to a subscription model
We have been witnessing this business trend over the past few years. According to a report by Zuora, the subscription economy has grown by more than 300% in the last seven years. This is no surprise considering the massive success of online streaming services such as Netflix and Amazon Prime.
The subscription model is not only a trend among software businesses — but Gartner predicts that by 2023, 75 percent of organizations selling direct to consumers will also offer subscription services.
Consumers now prefer the convenience of monthly subscription services instead of paying lump-sum amounts. Subscription models also give consumers the ability to change to another vendor in case of a bad experience.
Gone are the days where you make a ‘sale’ with a customer. In the future, it will be less about making one-off ‘sales’ and more about building long-term relationships with customers. More businesses are adopting this model, which gives them predictable revenue over extended periods.
Small businesses will stand to benefit the most from this shift towards the subscription model. They will have a clearer picture of how much money they would make and can plan growth initiatives accordingly without taking too much risk.
Skills will matter more than degrees
The education system, as we know, will undergo a paradigm shift in the coming years. The pandemic brought the traditional schooling system to a grinding halt. Schools had to transition to a remote learning environment almost overnight. This model was not very effective as schools never prepared for such a situation. Parents being skeptical about online classes turned to alternatives such as ‘micro schooling’ where a group of students (usually less than 10) from the community come together to study.
With all the resources and courses available online, there are no gatekeepers to education anymore. Anyone can learn anything from computer science to psychology from the world’s very best teachers, thanks to the internet.
We will see more people acquiring skills in a non-traditional way through online courses and certifications in the coming years. Businesses will put more emphasis on skills rather than degrees from prestigious universities.
Trends that will continue from 2020
We had listed several small business trends last year. There are some trends from 2020 that will continue this year as well:
Artificial intelligence is no longer just a buzzword
Listing Artificial intelligence as a small business trend might throw off some people, but AI is no longer just for big enterprises. With the democratization of software, AI tools are available at affordable prices allowing small businesses to utilize them as well. AI can help small businesses that are usually short on staff to automate processes and improve their efficiency.
3 out of 4 C-suite executives believe that if they don’t scale artificial intelligence in the next five years, they risk going out of business.
AI is a part of our everyday lives today. Many apps that we use daily such as Facebook and Netflix, use AI to gauge our interests and suggest content. However, these algorithms might just be scratching the surface of what AI can do.
Can small businesses use AI to deliver a personalized customer experience? What if you could immediately notify a customer that a particular product they were looking for is back in stock? What if you could send personalized offers to customers based on their shopping history?
Small businesses can use artificial intelligence tools such as bots to deliver 24×7 customer service. In addition to customer service, thanks to machine learning and deep learning models, AI can also learn from data sets, analyze new information from many sources, and adapt accordingly. This sort of decision making capability can be useful for small businesses to take on their bigger counterparts.
The mental and physical health of employees will be prioritized
If the pandemic has taught us one thing, it is that our health is of utmost importance. The lockdowns and work from home situation also took a toll on our mental health. Employee health and wellness will remain to be a priority for organizations.
Organizations will look to keep their employees engaged and happy during the work from home period. Without the luxury of being able to meet face to face, businesses will have to innovate and recreate the office atmosphere so that employees do not feel lonely.
As small businesses, you have the advantage of smaller teams, and you can create close-knit relationships between your co-workers. Even if you are working remotely, you can always plan for a fun evening together over a video call. Small acts can go a big way in bringing your team together and boosts employee morale.
Remote first work culture
Remote work was predicted to pick up pace in 2020, but no one could have foreseen the pandemic that made remote work the only possible way to work. Every company was forced to chalk out a plan for remote work, even those that never had such a policy in the first place.
According to Gartner, 88% of the organizations worldwide made it mandatory or encouraged their employees to work from home during the pandemic period.
Remote work is no longer a privilege given to employees. It is here to stay and might even become the preferred way of working. Companies might become remote-first in their approach. In fact, many companies such as Zapier, GitLab, and InVision are already 100% distributed.
2021 and beyond, we will notice many companies moving to a distributed working model. It makes perfect sense for small businesses to hop onto this trend and go remote — they can save big on real estate and infrastructure while also giving them the flexibility to recruit talent from around the world.
Ad spend moves to digital media over traditional
Traditional media such as TV and radio are waning due to the rise of the internet. Television faces stiff competition from streaming services such as Netflix, Prime, Hulu, etc.
According to a Nielsen report, 18-34-year-olds spent almost three times as much time using apps and the web on smartphones than watching traditional TV.
Traditional media such as newspapers, radio, and television are losing their charm. Digital media is where customers are spending most of their time. According to Zenith’s Advertising Expenditure Forecast, more than half of the global ad spend will be on digital media by 2022.
Small businesses can seize this trend and focus on creating a digital presence. The website will become the business’s new storefront. By building an online reputation, focusing on social media, and running digital ads, small businesses can grow by leaps and bounds.
We have discussed several trends in this blog post. I want to close off by saying that small businesses are uniquely positioned to take advantage of these rapidly changing times. Small businesses have the advantage of being nimble enough to quickly adapt to future trends, making them more future proof than their bigger counterparts.
What do you think would be some of the biggest small business trends in 2021 other than these? Leave a comment below!
Illustrations by Mahalakshmi Anantharaman
Animation by Yuvaraj Linganathan
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