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3 Ways to Accelerate Business Growth—No Matter the Circumstance Entrepreneurs can use volatility to their advantage.
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There's no doubt about it: The current global situation has created challenges for everyone, including entrepreneurs. Businesses across the country have had to close their physical doors and make numerous changes to their business models along the way in order to stay afloat. As restrictions change and pivot, with businesses in different industries re-opening, many are realizing new opportunities as they adapt to the new normal.
As consumer behavior shifts, online sales have skyrocketed. Telecommuting is the new normal. Discretionary spending has reconfigured itself. As a result of these and other changes, companies are scrambling to adjust their business models, says Bernardo Martinez, Vice President of Global Merchant Lending at PayPal. For many, the result isn't just survival — but growth.
Despite the uncertainty, Martinez shares insight into how business owners can use the current volatile landscape to their advantage.
1. Identify the whitespace.
Disruption has a tendency to unearth new opportunities. The pandemic has accelerated shifts in consumer behavior, hurtling us forward three to five years, Martinez says. "[Digital sales] have been growing rapidly, but it was mainly discretionary items," he says. Due to the restrictions imposed by the virus, however, we've become more comfortable ordering essential items online, including groceries. Like people's familiarity and willingness to engage over video platforms like Zoom, it's a shift Martinez believes will stick around even after Covid-19 has receded.
For entrepreneurs, these changes unveil opportunities. Take a soccer coach. Once constrained to teaching students who live in close physical proximity, moving lessons online allows reach kids across the country. On a larger scale, the move from in-person to remote learning has created an urgent demand for interactive educational software, fueling the growth of a number of ed-tech startups. "You can apply that same logic to any [industry]," Martinez says. Each shift in consumer behavior creates a window for companies to step up and meet the evolving demands.
2. Embrace hybrid models.
Martinez recalls an entrepreneur he knows whose sales fell by 90 percent at the start of the pandemic, a terrifying drop with which many small-business owners can relate. As the months wore on and it became apparent the pandemic was not a momentary event, Martinez says the business owner worked to create a new revenue channel: whereas before, he'd sold products exclusively through distributors, he began selling direct-to-consumer via online marketplaces. As a result, his sales have begun to recover.
Once things normalize, he will have the ability to sell through distributors and online, "an environment he never tried before," Martinez says. "Hopefully, it's a more vibrant company."
Martinez has seen businesses across industries find success by adopting a similar approach. Many restaurants, for example, have invested in a more robust delivery model, while maintaining in-person dining. Some have gone so far as modifying their menus, creating a separate takeaway version featuring dishes that travel well. "We are going to see the models evolving as people try to learn what works and what doesn't," he says.
3. Plan for the long-term.
"We are in the first inning of the baseball game," says Martinez, who feels that many of the changes in consumer behavior caused by the pandemic will outlast it. As a result, he recommends developing a roadmap that extends beyond the next six months to a year. For many entrepreneurs, this means relying more on digital engagement and sales. "They need to embrace the new world," Martinez says. Whereas in the past, physical location was key to a retailer's success, going forward, it will play a less central role as people continue to shop online.
This requires strategy — and time. It's too easy to fall into a trap in which your actions are driven by all the previous decisions you've made, rather than as steps toward a larger goal. "If you think you are going to embrace the online environment and have a multi-channel process, understand how your legacy partners can bring you forward," Martinez says. "It won't happen overnight."
Visit PayPal for more tools and information available for entrepreneurs to accelerate business growth.