You have probably read several articles on why most businesses failed during the pandemic and although we might state some familiar points, our viewpoint is quite different and unique. It is a fact that the coronavirus changed the entire business world and greatly reduced the purchasing power of customers. However, the destruction of the business world by COVID 19 also revealed what needed to change for most businesses.
Failure to adapt to change.
Technology is changing the way we run businesses and as much as this might be a plus for the business world, most businesses are too slow to adapt to new technological advancements. Writing for Forbes, Customer Experience Futurist Blake Morgan revealed how slow businesses adapt to change. He stated that only 27% of companies believe digital transformation to be a matter of survival. Despite the demise of heritage brands such as Blockbuster and Myspace, businesses are still unconvinced they need to adapt to the changing world. At the peak of the pandemic, most businesses were shut down due to lockdown restrictions. However, businesses that had an online platform to serve their customers were still in operation. In this case, a single eCommerce website made the difference between surviving the pandemic and going out of business.
Lack of strategic partnerships
Strategic partnerships are highly overlooked in Africa. An agreement between two small businesses serving two niches in the same industry is very rare but can be powerful. Regardless of your company’s size or industry, forming strategic partnerships can prevent stagnant thinking and help you achieve business goals that may otherwise be out of reach. Working with another company toward a common objective can expose your employees to new perspectives and provide them with opportunities to learn new skills. Furthermore, it’ll help you expose your brand to a different audience. Partnering with influencers is also another aspect of strategic partnerships that your business can tap into.
Poor Money Management
A primary reason why most businesses failed is poor money management. In most instances, a business owner is intimately aware of how much money is needed to keep operations running on a day-to-day basis. This includes funding payroll; paying fixed and varied overhead expenses, such as rent and utilities; and ensuring that outsourced vendors are paid on time. However, most business owners are not in tune with how much revenue is generated by sales of products or services. This disconnect leads to funding shortfalls that can quickly put a small business out of operation. Most business owners didn’t have enough cash saved for emergencies.
To survive in this new business era, it is essential to do your best to keep up with technological advancements. Equally important is looking out for strategic partnerships that will push your business to the next level. Last but not least, always remember that Cash Is King in this new era.