The supply chain pressures felt by large businesses over the past few years have trickled down to small businesses. This is making it difficult for smaller companies to compete on a local level. According to The Wall Street Journal, many small businesses are using their cash assets or taking over debt simply to compete with bigger competitors in an ever more aggressive economy afflicted by inflation and the increasing costs of doing business. 74% of small enterprises say they’re still coping with increasing supply costs, which hasn’t changed from 2021’s Q4 (CNBC). The survey also shows the amount of businesses raising costs for consumers rose to 47% within the first quarter.
Losing Leverage as Buyers in A Broken Economy
The supply chain pressures felt by large businesses over the past few years have trickled down to small businesses. That makes it difficult for smaller companies to compete on a local level. The result of these supply chain pressures is rising costs coupled with fluctuating sales volumes. As small businesses search for ways to cut expenses, they’re increasingly turning to technology solutions to gain an edge over their competitors.
Companies that employ managed service providers say they’re saving money each year because of using one. Now is a great time for small businesses looking to either streamline their internal processes or compete with larger rivals to turn to third-party services like MSPs. Managed service providers can provide effective support at competitive prices.
How The Pandemic Induced Ongoing Inflation
Large businesses depend on supply chain management to cut back costs and advance their production cycle. Sadly, with the COVID-19 pandemic, many businesses are being forced to pay more for supplies even if those items are essential. What’s worse is that they have less control over prices because they don’t deal directly with manufacturers. So when inflation hits, it hits them hard.
To process the final product from its initial source to the consumer, there is an engagement of varied activities, resources, and people to ensure that the supply line does not crumble. This normally allows small businesses to satisfy their contractual responsibilities opportunely. Regrettably, the transmittance of the COVID-19 virus altered everything.
The COVID-19 virus hit all sectors of business. This includes retail, agriculture, mining, and others that are directly related to production. Then came inflation–because of supply chain pressures from rising commodity prices. Demand was up and supply was low. This added pressure put small businesses in a tight spot. Most small business owners don’t want to tap their company accounts. They want to keep a certain amount of money available for operations, inventory, employee compensation, and even expansion.
Businesses Can Combat the Results of Inflation
The drastic effect of inflation on supply chains has placed many small businesses at a disadvantage to larger rivals. To combat rising prices, small businesses can shift their focus from short-term gains to long-term sustainable solutions. The best way that small businesses can protect themselves against these pressures is by investing in expansion capabilities rather than attempting to cut costs during volatile periods.
This is one area that managed service providers excel in. The MSP model allows small businesses to focus on growth without having to worry about keeping up with technology or high transformation costs. This also gives businesses time to tackle more important challenges, such as expanding their customer base while they maintain their quality of product offerings. With small business loan rates at record lows, there’s never been a better time than now for small businesses to grow—and with help from an MSP, they can skyrocket.
How Can Online Technologies Keep Companies Afloat?
Small businesses can use online technology to improve their supply chain management. For example, they can rely on mobile applications that can increase efficiency by alerting companies when a shipment gets delivered. Businesses can also start automating tracking numbers for their shipments, instead of relying on data entry. If done correctly, automated tracking number generation allows companies to get shipments from point A to point B faster. That is because there is less time spent confirming accurate data while in transit.
Your small business can also stay afloat during the COVID-19 crisis by enabling online ordering. A small company using technology to facilitate online ordering might see a 50% increase in their revenues. An online store allows customers to have access to products any time, unlike traditional brick-and-mortar storefronts.
Finally, there’s a plethora of business apps available that can assist with everything from payroll management to inventory tracking. Using technology is especially beneficial because it allows small businesses to outsource more tedious tasks. Then they get to focus on what they do best: generating revenue. Ask your MSP about software solutions to help keep your small business afloat during COVID-19.
In the meantime, start thinking outside of traditional offerings. What are customers in your industry really looking for?
Can Cybersecurity Technologies Keep Small Enterprise Alive?
Cybersecurity technologies can prevent small businesses from losing business and money to cyber-attacks. Many small companies don’t implement security software or hardware because they believe that smaller targets are not attractive enough for hackers. However, cyber criminals are always on the lookout for new targets and may strike. Small businesses that don’t have proper protection in place leave themselves vulnerable to breaches of data integrity, supply chain disruptions, and financial losses, like:
- Data breaches could expose information about customers and employees, resulting in a tarnished brand reputation Significantly reduced revenue
- Lost sales opportunities
- Higher credit card charge-back costs (more than $40 billion per year)
- Legal fees associated with litigation or regulatory enforcement actions Negative publicity and investor concerns
Cyber thieves aren’t picky when choosing small businesses as their victims. They will hit anyone who seems like an easy target.
Where Can Businesses Find the Funding for Expansion?
While demand for small businesses is at an all-time high, funding sources are scarce. If you’re looking for expansion capital, think about tapping into private lending. Many lenders now focus specifically on funding small businesses. These small business loans can be a good way to secure funds without having to go through all the red tape involved with getting funded from traditional lenders.
It’s important that you take time to find a lender who specializes in small business loans, rather than taking out a personal loan. A private lender is much more likely to understand your company’s unique needs. They are also more likely to offer flexible terms based on projected growth.
Picking The Best Lender
With so many lenders offering small business loans, choosing one can be a challenge. It’s important to find a lender who offers rates low enough that you won’t need to raise prices or trim costs. But it also needs to be high enough that you can still earn a fair return on your investment. Do some research online to see which lenders are most trustworthy and how their loan terms compare to other banks. You may also want to consult with financial advisors or an accountant. They can help identify loans that will work best for your situation.
Once you’ve picked a few potential lenders, call them up and see if they offer special financing for small businesses. These programs often come with competitive interest rates. You can also talk to each lender about your unique goals and needs. For example, you might need working capital now rather than traditional financing down the road. Ask whether they have loans tailored toward small businesses like yours. A good lender will do everything possible to make sure you get what works best for your business.
Don’t Try to Digitally Transform Your Company Alone
Small businesses can innovate more quickly than their larger counterparts. This flexibility is due in part to small business size. Since there are fewer employees, they have quicker internal decision-making processes. They also don’t have to go through as many levels of approval before moving forward with a new idea. This gives them both creative freedom and agility that larger companies simply don’t have. However, don’t let this flexibility fool you into thinking you can digitally transform your business alone!
If a small business doesn’t have proper processes in place—and doesn’t hire wonderful talent—they may find themselves severely outmatched by their competitors. Digital transformations get complicated to undertake. They require complex orchestration at both an internal and external level. Small businesses need knowledgeable professionals who can help them navigate through digital transformation initiatives efficiently.
The most cost-effective solution to this is to make use of a managed service provider. An MSP can not only support you with your current technology. They can also supply technological services that small businesses might not afford without experienced help. Social Online By Design specializes in helping small businesses on their digital transformation journey. As a multi-talented and empathetic MSP, I always start by listening to you. I want to know what you’re trying to accomplish, as well as what business issues are keeping you up at night.