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What does it take for SMBs to survive and thrive in the 'new normal'?
As the country starts slowly emerging from the tightest ever enforced restrictions on movement, many SMBs are still finding their feet in the 'new normal'.
To survive lockdown, many SMBs have had to rethink their business models and create fresh ways to meet customer needs. SMBs will need to continue to adapt as restrictions progressively ease.
Businesses that are opening up again have to minimise potential transmission of Coronavirus by following best practice guidance for customer distancing, queuing, staff protection and cleaning. But there are other critical business decisions to address.
Changing a business model in 2 weeks
Changing your business model is not for the faint-hearted. Still, in some cases, it has made a crucial difference to business survival. With social distancing slowing the ability for retailer SMBs to service customers, they must create other ways of meeting customer demand.
Faced with the loss of walk-in trade, the Chesterford Group, which runs fish and chip shops, changed its operating model in just two weeks. It responded to the restriction on movement by launching click and collect and home delivery services. This opened up new revenue streams, and these services will complement their traditional shops going forward.
Accepting and fulfilling orders
If customer demand for your goods and services is still there, you need to look at how to accept and then fulfill orders. The smaller your business, the less likely you are to have the infrastructure in place to process and collect payments, for example.
Cleaners, hairdressers and other cash-based service businesses can reduce risk by introducing cashless transactions. Using a card payment solution such as Square or iZettle will enable you to take relatively small payments cost-effectively.
Smaller, more frequent orders
Many customers, such as the elderly or vulnerable, are unlikely to return to retail shopping in the short term. Therefore subscription services such as regular fruit and veg boxes will remain in demand.
Subscriptions are an excellent way to generate regular orders, which boost cashflow. Automated Direct Debit solutions can help by taking away the hassle of collecting payments which benefits you and your customer.
Switching target market
Local catering company Flavour of Mauritius saw all of its business in events and private catering dry up completely between March and September. Therefore, they quickly switched focus to use their stock of food to create 3,000+ free meals for local hospitals, and other good causes. This gained the company media coverage from Reading to Mauritius.
Additionally, it created a home delivery service focusing on two key geographic areas, with orders placed over the phone, email and even WhatsApp. As word has spread, it has increased the number of meals it is delivering. The firm has also diversified its product line. It has recently launched a range of Father's Day gift baskets to increase revenue streams further.
Taking a step into the unknown
The Whaley Bridge, an artisanal bakery and shop, had an innovative response to Covid-19. It moved quickly to enable online orders and added to its product line with an international cake and brownie operation.
There was substantial work to do in terms of how to promote the business, as well as create packaging that was suitably robust for delivery. But, as a result, it has received orders from across the UK which is driving growth at a scale the bakery has not experienced before, with the owner commenting "this really seems like the future for our bakery".
Technology can play a vital role
Investing in technology may sound like a risky move at this time, but it could help you to cope better with the new normal. By using apps and cloud-based services, SMBs can offer features that were previously only open to larger companies.
Video calling and online booking systems are just two examples. But more and more companies are turning to payment automation solutions. This can allow you to process payments at the time of booking via a hosted payment page or automate invoice production and distribution.
Reviewing your business
For many SMBs, nothing quite replaces face to face contact. However, there are lot of lessons to be learned from companies that moved aspects of their business online. During the lockdown, Goddard Chiropractic began to offer online and phone consultations, offering advice and guidance on self-treatment lockdown.
They also used the time during lockdown to productively complete redesign its website. This was to make it easier for people to contact them, download free resources and submit their email address, for future marketing campaigns. It also moved its newsletter from print to online, which saves time and cost too.
Boost your capabilities with freelancers
The economic uncertainty has meant that a lot of talented people are suddenly finding themselves unemployed. Many of them are looking at how they could provide services as an SME or on a freelance basis. This could allow you to boost your business capabilities in certain areas without committing to a full-time appointment.
Finance, marketing, and sales are all functions that SMBs need, but often the responsibility falls to the business owner. Outsourcing can be cost-effective and free up valuable time to spend on addressing the most pressing business challenges.
Keep an eye on outgoings
SMBs need to keep a keen eye on costs and avoid any unnecessary spending. Now is the time to be extra vigilant about potential fraud, from duplicate invoices, fake invoices and fraudulent payment requests.
Over the last year, more than a quarter of SMBs suffered some form of fraudulent loss. Recent research by Bottomline also indicates that 69% of decision-makers agree they should be doing more to mitigate against payment fraud. Take some time to review your payment and authorisation processes and close any gaps that could leave you open to the risk of fraud.
Fear of change often holds people back. But Covid-19 has eliminated that as an option. Any SMB that is waiting for things to go back to the old normal is in for a rude surprise. Indeed, most predictions point to a second or third wave of restrictions as a likely scenario.
Businesses that are embracing change are almost certainly getting into unfamiliar territory, and venturing out of their comfort zones. Still, the rewards are there for SMBs that are willing to take some risk.
Above all, SMBs must build flexibility and adaptability into their DNA. If something isn't working, you need to change direction quicker than ever before.
The 2020 Business Payments Barometer arrives at an unusual time, amidst COVID-19. It provides a snapshot of how companies are managing their payments pre-pandemic. The report analyses where companies are set to make investments over the next year, where they won’t, and how a ‘new normal’ might influence these findings as we emerge from the pandemic.
Cashflow is the joint biggest area of concern for just over 400 surveyed small business owners, according to Bottomline Technologies’ own research. Getting money in from unpaid invoices is, along with finding and retaining customers, the joint most pressing worry for SMBs.
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