The pandemic changed business landscapes in many different ways, and the emergence of more startups was clear. In fact, statistics at the end of 2021 showed that the number of new companies grew 21% in the space of one year to 810,000.
While a significant percentage of startups still inevitably fail, thousands are thriving. It has ushered in the beginning of a new and exciting era.
Startups capitalising on the changing tide
The shift towards SMEs and local businesses in recent times can be attributed to many contributing factors. Consumers are now more invested in social responsibility than ever before, and supporting local firms feeds into this. Meanwhile, many have felt let down by global companies in recent times, especially at the height of the pandemic.
Meanwhile, entrepreneurs were in a position to finally start side hustles during the pandemic. Others found that they were forced to create their own opportunities after losing jobs during these difficult times. Either way, there is a growing demand for local businesses as well as a growing volume of them.
SMEs are performing well in a range of sectors, responding very well to the rising need for domestic distribution services. Likewise, small business owners are making good use of cosmetically damaged items. This can be through ideas like ‘wonky fruit’ and ‘odd coffee’. Subscription services including monthly discovery clubs have witnessed significant growth too.
Savvy business owners have been able to operate home-based businesses and use remote workers to keep costs down. Meanwhile, they have tapped into social media marketing and creative concepts to reach huge audiences. Without spending a fortune.
Clients have become accustomed to both online shopping and researching local brands from their phones. It has opened the door to opportunities in both domestic and international markets. This is providing great accessibility for SMEs. Not least because there are a plethora of useful tools to facilitate this. The use of a foreign currency account, for example, creates an improved experience for consumers in multiple countries. Multilingual chatbots are another great tool.
In addition to success in traditional models of buying and selling products and services, new SMEs are using new models. Affiliate marketing, dropshipping, and content creation are just three examples. In each of them, handling stock isn’t a necessity. By reducing the risks and costs, startups can grow in an organic way.
Perhaps above all else, many of the entrepreneurs who started businesses in the pandemic are blessed with passion. In turn, this shines through to influence employees, clients, and the future of their companies.
Challenges facing new businesses
Of course, new businesses in the UK and beyond continue to experience obstacles. While many entrepreneurs used the pandemic to finally start their ventures, there has been a big mindset shift from employees too. Workers in the tech industries are returning to big companies, which is making it harder for some SMEs to source talent. However, the aforementioned options of outsourcing and remote working have eased the pressure.
Despite a growing appreciation of what SMEs have to offer, some clients still want to work with ‘big companies’. This is particularly noticeable in some B2B circles. Virtual office addresses do offer an option for businesses to make themselves look more established. But in most cases, startups are better off positioning themselves to target a niche market that appreciates their needs.
Limited customer interactions have played a disruptive role for many startups too. Many have found themselves facing a longer trial and error process than they may have previously done. Retailers and startups offering local services now utilise pop-up stores and mobile visits to hit their goals. Versatility has become a major feature.
Consumers are willing to trust SMEs, but they also have greater demands. Aside from providing good products and services, companies must also prove their brand ethos. Social responsibility and efficient operations are very high on the agenda. They must not be overlooked by any company wanting to succeed, regardless of size.
The other significant challenges facing new businesses relate to cybersecurity. Statistics show that SMEs are often targeted as they are seen to have reduced safety measures in place. Over half will stop trading within six months. Nonetheless, the current generation of entrepreneurs is better equipped to combat the risks than any other,
Adapting to modern challenges has been one of the hot talking points. Likewise, the increasingly competitive nature of the marketplace must not be ignored. Still, there have been many success stories in recent times for both online and offline startups. The second half of 2022 is sure to deliver many more.
Source: London Issue