Council Post: Seven Small Business Trends To Watch In 2021

Amy is President of US Insurance Solutions at Principal Financial Group and a loyal advocate for the SMB community.

It’s a year to be wary of bold predictions.

It feels like a lifetime ago that business owners and investors were obsessed with how much longer the decadelong United States economic expansion would last. Then the pandemic swept in, the annual federal budget deficit tripled to help steady businesses and consumers, and all anyone could do was stay humble and prepare as best as possible to face the unexpected.

But if you’ve launched your own business, you understand what it takes to pivot and adapt, particularly in a year that has so fundamentally altered the small business landscape. Take these seven trends as indicators – not bold predictions – of how to build a better and more durable business plan for 2021.

Small Business Owner Optimism: Recognize The Opportunity

Everyone is bombarded by news of economic turmoil, including lingering unemployment and hits to specific sectors. But look beyond the headlines and notice the big share of employers successfully navigating the pandemic – whether your business relies on B2B or B2C. Your customers may be more receptive to hearing from you than you think. Or there could be a regional bright spot you’ve overlooked. The Principal Financial Well-Being Index saw rising confidence in the economic outlook and expansion of operations among small businesses (those with fewer than 500 employees). And the National Federation of Independent Business (NFIB) Small Business Optimism Index remained above its historical average this past fall in the face of rising uncertainty. 

Remote Work: Some Of The Expansion Is Likely Permanent

Even essential manufacturers that kept factory floors churning have allowed office staff and executives to work from home. Thirty-seven percent of employers last year launched or expanded remote work – and were happy to see it didn’t hamper employee communication or productivity. Yes, the long-term effects of remote work should be monitored, and small-business leaders need to anticipate potential pitfalls for a range of factors, including employee morale and cybersecurity. But the convenience and flexibility of remote work – including reduced commute time and expanded job applicant pools – are likely here to stay.

E-Commerce: Customers Are Learning To Buy More Online

One constant throughout widespread lockdowns: Customers are more ready and willing than ever to shop online. It’s possible to see double-digit percentage annual growth in e-commerce. The e-commerce surge from the first quarter to the second quarter of 2020 alone was more than 31%. Much like remote work, this trend is expected to outlast the pandemic – which is why retailers of all sizes are taking heed and adapting their operations to match. Everything from your market analysis to how you process payments could benefit from a reevaluation with this in mind.

Cybersecurity: Protect Your Digital Front Door

This deserves special emphasis: You wouldn’t leave your brick-and-mortar office unlocked, so practice good cybersecurity as you expand online. A single data breach can cost a small business hundreds of thousands of dollars. You’ll stay money ahead by taking preventative steps – especially in a year when Covid-19-themed cyber scams surged 605% in the second quarter. There’s plenty you can do yourself, such as restricting access to critical business information and continually educating employees on phishing scams. For more expertise, third-party cybersecurity firms can provide consultations or full-time support, depending on your business need.

Business Purpose: Embrace Community As Well As Customers

Even before the pandemic, businesses had become more deliberate in explaining how they benefit society at large – not only owners and shareholders. Much like we now wear face masks to help protect each other as responsible citizens, your business should have visible signs of how it serves as a good neighbor. Have you tried partnering with other local businesses on a project or campaign, even if they’re from a different industry? Have you invested time and resources in a local nonprofit that aligns with your mission? In a more connected society, you may need to be able to articulate a purpose that fits your business and inspires employees to see the impact of their work beyond the balance sheet.

Employee Benefits: Reshape For Worker And Business Alike

The tendency for business owners to feel an almost familial responsibility for employees – even if it’s not a family business – became only more pronounced in 2020. The vast majority of employers surveyed in my company’s Well-Being Index were maintaining or expanding benefits – including new recognition of the importance of mental health and well-being to combat pervasive stress. Some businesses enroll in an employee assistance program, or EAP, to provide greater access to phone counseling and other support services. Meanwhile, 66% of Americans say the pandemic has helped them better understand the value of life insurance, with one-fourth purchasing it for the first time. And the value is apparent to businesses in helping to attract and retain employees by providing more security in volatile times.

Resilience: Small Business Owners Are Tougher Than This Pandemic

This should seem obvious to anybody who spends time with entrepreneurs: The sheer variety of ways small businesses have adapted is inspiring. They’ve managed to stay focused on serving customers despite all obstacles. They’ve split their workforce into distinct shifts to protect employee health. They’re manufacturing entirely new products. Businesses likely will need more federal support as a bridge to recovery before getting past this pandemic. But I’m confident that in 2021 we’ll watch Main Street America help get us back on the road to growth.

Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?