The current COVID-19 pandemic has been a public health catastrophe and put millions of people out of work. As we ease out of restrictions and lockdowns around the region, startups and SMEs are confronted by a very challenging business environment where consumers may not have the same spending power, but will also face movement restrictions.
In this ‘new normal’, people and businesses are turning online to purchase goods and services. SMEs and startups need to leverage the online platforms available – even enterprise ones.
We look into the changing environment and what it means for SMEs and startups in the industry.
Increase your marketing channels
Whether it is pay-per-click advertising, email marketing or display advertising, too many startups and SMEs rely on just one digital marketing channel. What might have been enough (but maybe not optimal) is no longer sufficient as businesses look to expand their outreach during this period. Even enterprise sales often start online nowadays as businesses realise that meetings or networking sessions are no longer a viable lead generation tool.
Multichannel marketing is often not easy for startups and SMEs due to limited resources. Fortunately, technology can help reduce cost and be effective. Leveraging existing platforms for ecommerce sales like Lazada, Zalora, Shopee and many others can be an easy way for businesses to get online quickly if they are B2B.
Enterprise businesses may need to consider search marketing or improving their SEO and online platforms. With customers looking for solutions online, often the best way to reach them is to capture them at the start. So when they search for your service or product, you need to show up – this can either be done via paid ads (Search Engine Marketing or SEM) or through organic search results.
Another alternative to consider is public relations and leverage the media as channels to reach out to your audience. This can be a cost effective and affordable way to improve inbound lead generation and improve your SEO through backlinks.
Improve profit margins
Basic economics states that when a business has good margins, it needs to sell less to break even. This leads to improved cashflow and runway to keep the lights on even during difficult periods.
Technology can help improve efficiency and reduce waste, thus improving the profit margin. But given a lack of technical capability or funds, it might be necessary to fine-tune your business model to generate better margins. One way to do so, is to look at high value items or those with quick sell-through. Reducing your inventory or number of SKUs can help reduce advertising costs and minimize operational inefficiencies for bigger margins.
Expand in to as many regions as possible
As startups and SMEs move online, it also provides them with an opportunity to expand their reach. This is important, because as COVID-19 has shown, a crisis in that region can halt business very quickly. By opening up new markets and expanding your outreach online, it should allow you to continue to function at some capacity even during difficult periods.
From ecommerce solutions to better video conferencing software, there are numerous online tools available for startups to cost-efficiently expand their services across multiple markets.
This requires changes to business models and a reliance on remote teams or freelancers. Startups and SMEs will need to adapt to the times.
There are no quick fixes nor preventative measures that you can implement, which will protect your business from unprecedented issues like COVID-19. However, diversifying your business and building cash reserves can help you keep operations ongoing during difficult times.