From increased rainy-day funds to purpose and empathy-led businesses, here are the small business trends you might want to be aware of this year.
We can’t offer you a crystal ball that outlines what the next 12 months will hold. We can, however, offer you the next best thing – expert predictions from the small business community.
We spoke with several Aussie small business owners, as well as John Scutt, managing director at business management consultancy Linfield Partners, about the small business trends they believe will be a big focus in 2021.
Rainy-day funds, digital and new payment models
Small business owners will be paying very close attention to their cash flow projections this year, says Scutt, perhaps more closely than ever before.
“We’ve got JobKeeper finishing up in March, so small business owners will be keeping a close watch on their liquidity in the lead up to that – and potentially putting aside some money to brace it,” he says.
Perhaps the most obvious trend, says Scutt, is the investment into creating a digital, ecommerce arm of your business – “it’s almost mandatory”, he says.
For those small business owners not already embracing a digital platform, this year will see them do away with their attitudes of “this is how we’ve always done things”, he adds, because their business survival will be dependent on it.
Putting people first
Scutt says the renewed focus on mental health of 2020 won’t be going away anytime soon.
“Mental health issues can impact people’s performance and when you’ve got a small business, you’re typically relying heavily on just a few people. If performance is disrupted, that can heavily impact SMEs.”
He also thinks there will be a greater focus on understanding various workplace laws, especially regarding the categorisation of employees (i.e. are they casuals or part-time) as getting this wrong can lead to significant fines.
“A lot of the time that can just come down to not understanding the status of the employee or their employment contract hasn’t been updated properly… but [paying that fine] can be the kiss of death for a small business. So I think we’re going to see a lot more [education] around this in 2021.”
(For more information on classifying casuals, you can visit the Fair Work Commission’s website).
But what else is on the horizon? We’ve wrapped up some of the key trends in this handy infographic:
Small business owners’ predictions for 2021
Here are some predictions for the year ahead from within the small business community.
Girl power
Nikki Hamilton, owner of Seedling Digital, thinks we will see a rise in female-owned businesses in 2021.
“Women have been disproportionately affected by loss of employment, childcare closures, etc, due to COVID-19. A logical step for many of these women [will be] to start their own business and enjoy enhanced flexibility and financial independence. I’ve seen a huge rise in women succeeding as freelancers and business owners. I support many of them through my work!”
Prioritising partnerships
Michelle Pavel, owner of Partnering for Profit, says 2021 will be all about collaboration and partnerships.
“I’ve built a partnering platform for [Australian] businesses to collaborate with each other and the reason I think partnerships will be a trend in 2021 is because I’m seeing a lot of other partnership businesses popping up… we’re not competitors though, we’re all doing our own thing and helping each other.
“In 2021, I’m really hoping we move out of the ‘me’ mentality into the ‘we’ mentality because that will help us build the small business community back up.”
A focus on purpose
Dora Nikols, owner of PR and social purpose agency Social Mission, says displaying your business’s purpose will help you stand out in 2021.
“[Small business owners] need to boldly promote their purpose through their culture, marketing and communications, as research shows consumers are [four times more likely] to switch brands to one that supports a good cause.
“If we look at some of the most successful start-ups and small business brands, they have a purpose that reflects people’s values. For example, Thankyou Water, Who Gives A Crap toilet paper and Koala mattress, etc.”
The automation age
Pedram Afshar, founder of Amaka – an accounting integration software platform – expects automation to continue dominating the conversation in 2021.
“By automating business processes, small businesses open up a tonne of resources that give more opportunity to get ahead. Though it might take some groundwork to set up automation, it’s worth it in the long run.
“For example, as a restaurant owner, you might spend half an hour a day on sales accounting and data reconciliation. Say an hour of your time is worth $50, that adds up to $500 a month or almost $6,000 a year.”
Accounting isn’t the only area that Afshar believes people will look to automate this year. He imagines all aspects of business being streamlined through technology, from email marketing to customer support or employee onboarding.
“Actively implementing and improving automation processes is one of the best ways to future-proof your business,” he adds.
If you like what you see when looking into the crystal ball, but need a funding boost to jump on these trends, talk to one of Prospa’s lending specialists about how a small business loan might be able to help.
