Building Resilience in Small and Medium-Sized Businesses

Krishen Iyer

The Organization for Economic Cooperation and Development (OECD) recently published an analysis of entrepreneurship policy measures from February 2020 to February 2021. The paper reported that small and medium-sized businesses (SMBs) in nearly 26 countries reported between a 30 and 50% drop in revenue. The OECD also found that the pandemic widened the gap between large corporations and their smaller counterparts. For example, in the United States, the top 10% of companies in terms of revenue did not report any change to their revenue between the third quarters of 2019 and 2020. On the contrary, all other companies reported a total revenue decline of 11%. 

Not every small and mid-sized business experienced the COVID-19 pandemic in the same way. While some startups endured, others closed their doors indefinitely. We can attest some of these changes to the uneven impact across specific industries. But, of course, there is more to the story. Here are some explanations of the resilience of SMBs during the COVID-19 pandemic and how you can apply these lessons to your organization.

The Impact of Remote Work and Digital Technology

High-performing SMBs can successfully duplicate strategies adopted by their larger counterparts and expect similar results. For example, before the pandemic, over 80% of SMBs in both the United States and Europe had a website. More than two-thirds of these organizations also had employees working via mobile devices, per the European Commission and a 2019 survey by the National Small Business Association. 

Although industries like hospitality are far less likely to withstand a lack of in-person activity than others, digital technology made resilience possible. Social distancing, lockdowns, and remote delivery forced organizations to rely on digital technology as a means of survival. If they had not done so already, organizations explored cloud-based solutions, video communications, and online commerce by the masses to keep their businesses afloat from home.

The growing acclimation to digital technology suggests that SMBs should continue to expand their organization’s capacity for innovation. Digital technology can help small to mid-sized organizations better understand the consumer experience and network with local businesses. By using technology to become a more front-facing organization (even from a remote location), your organization can build its brand recognition while maximizing its resilience.

During the COVID-19 outbreak, organizations that already had leveraged digital technology proved the most resilient. One survey found that small and mid-sized businesses that previously adopted software tools were approximately 30% more likely to implement new technology at the start of the pandemic. Because these organizations had the confidence and infrastructure to try something new, their digital technology capabilities expanded alongside their resilience. 

The Blurred Delineation of the Work-Life Balance

Remote work and digital technology made resilience possible so long as the proper resources to make these transitions existed. Research suggests that a remote employee’s ability to work efficiently depends on whether they have the proper space, tools, environment, and flexibility to contribute to their employer’s productivity. Fortunately, the comparatively smaller size of SMBs to their larger counterparts made a work-life balance via flexible scheduling more attainable. 

In the United Kingdom, 44% of SMBs reported that their flexible working practices would expand over the next year. Simultaneously, 30% of office workers report that they would consider leaving their current job if they could not work from home at least some of the time. Because the pandemic opened the workforce up to the idea of flexible working practices without sacrificing productivity, these practices can continue to benefit the morale, productivity, and resilience of SMBs post-February 2021.  

Small and mid-sized businesses typically face more challenges than large businesses in recruiting talented human capital. Because the demands of the workplace are continuing to shift, businesses of all sizes anticipate skills shortages. Therefore, SMBs should continue to use flexible work schedules to their advantage. Flexible work schedules may also empower talented job candidates to accept an offer with a smaller organization since a smaller organizational size implies more significant managerial attention. 

About Krishen Iyer

Krishen Iyer is a California-based entrepreneur with nearly two decades of experience in insurance sales and marketing. After graduating from San Diego State University, Iyer began managing lead companies and designing marketing strategies for affiliated insurance distribution centers. Today, Iyer spends the majority of his time as the founder and president of MAIS Consulting Firm. The firm partners with health and dental insurers to provide marketing and contracting consultancies. Iyer also owns the Iyer Real Estate Company, a full-service property management company dedicated to empowering individual owners to market their rental properties.