Article provided by Lulalend
Challenging at the best of times, the quest to stay afloat as an SME during the COVID-19 pandemic has been nothing short of an arduous battle. The pandemic’s economic impacts have been so devastating that around 33% of small businesses have closed outright.
Others, having survived through agile pivoting, dailing back to core functions and temporary closures have begun re-emerging into the market, as narratives around economic recovery loom large in the public discourse.
“For SMEs to effectively bounce back in the post-pandemic economic recovery period, it’s important to consider how they can adapt their approach to become competitive, modernized businesses. COVID-19 has heightened SMEs’ need to innovate to reach their customers. Digitization is an important starting point, but developing more efficient business practices and working with partners will play a key role in how SMEs are able to recover,” says Tom Stuart, Chief Marketing Officer at Lulalend.
Furthermore, agile new fintechs are providing the capital and platforms for SMEs to thrive in 2022 through real time access to funding, flexible cash-flow management solutions, and digital first bank accounts designed specifically for small businesses.
“Having effectively solved the credit problem – the single biggest challenge faced by SMEs – fintechs are working towards diversifying their offerings with an array of related financial services attuned to the particular needs of SMEs. These include AI driven cash-flow analysis tools to help business owners make better financial decisions, as well as solutions to help B2B businesses manage their trade credit more efficiently and with less risk,” Stuart says.
He says that SMEs are “one of the vital cogs that keep our economy turning”. SMEs have accounted for most of the new jobs created in the past four decades, and much of the innovation which has characterized these decades.
“Nevertheless, SMEs are frequently thwarted by the numerous disadvantages they face in comparison with the larger established corporations with whom they must compete. Factors like economies of scale, purchasing power, and brand name recognition work in favor of larger corporations and conglomerates,” he says.
He adds that SMEs must now innovate and exploit the benefits that their smaller size allows. “Successful SMEs are bouncing back by developing highly differentiated solutions and harnessing their agility to solve their customers’ problems faster than ever before’’.
Stuart says that embracing the potential advantages offered by today’s leading B2B fintechs could give SMEs a crucial strategic edge. Stuart suggests that their offerings could help simplify the task of managing business finances and free up time for business owners.
“SMEs can also differentiate themselves through a more human approach, their close-knit institutional cultures and family-like values to provide better quality working conditions for staff, as well as more personalized, emotionally resonant product offerings to set them apart from the dispassionate equivalents offered by larger companies. This can help compensate for the usually higher production costs of small-scale operations,” Stuart observes.
He also notes that innovative CSR projects displaying genuine solidarity can simultaneously serve the interests of SMEs’ marketing objectives and leverage the power of the public’s trust.
“A nimble, entrepreneurial mindset will be key to thriving in 2022 and beyond. SMEs should cultivate resilience via digitized, client-centric solutions, and the ability to remain fluid and responsive in the face of a tumultuous market,” concludes Stuart.