5 Problems Faced by Small Businesses in 2021

The global pandemic has changed the business landscape for 2021. Companies have been forced into rearranging their budget to invest in pressing issues that enable them to navigate the storm caused by Covid-19.

The disruption is beginning to settle but organizations still face many challenges as they adapt to the new normal. Below are the five problems faced by small businesses in 2021.

5 Problems Faced by Small Businesses in 2021

• Slow Economic Growth 

Despite the World Bank predicting an optimistic 4% expansion of the global economy in 2021, the reality for most businesses will be a subdued recovery. 

The number of job losses and collapsed businesses over the last year is expected to slow economic growth for another two and a half years according to leading economists. 

Coronavirus may still create waves of disruption in 2021 despite vaccines becoming available. Organizations will need to sensibly plan their budgets and anticipate financial uncertainty regardless of the optimism shown by central banks that are propping the economy up. 

• Increase in Cyber Attacks

Recent trends reveal there has been an increase in data security breaches since the global pandemic forced organizations to adopt work-from-home (WFH) policies. 

Cybersecurity risks leave businesses open to attacks in several ways. Not only are cybercriminals using sophisticated technologies, but end-users are also making it easier for malicious actors to exploit reused passwords, misconfigured servers, and mobile apps. 

The reality is that data breaches can put SMEs out of business. Around 60% fold in the first six months following an attack. And if the depreciation of customers doesn’t put you out of business, the penalties posed under GDPR will. 

• Managing Distributed Workforce 

WFH policies not only present a security threat for organizations, managing a distributed workforce brings a range of other problems with it. 

Whilst cloud computing software can enable businesses to overcome the challenges of communication and collaboration, the mental wellbeing of staff is the more pressing issue. 

According to a JLL survey, 74% of millennials miss being in the office due to the absence of human contact. Workers cited the interaction with colleagues is what makes them the happiest at work. 

A lack of interaction and engagement in social environments creates feelings of loneliness and isolation which can result in depression. A survey published by the World Health Organisation estimates a 64% loss in earnings is accredited to a loss of productivity in depressed employees. 

• Talent Sourcing

 As businesses wade waist-deep into the digital ocean, CEOs recognize there is a serious talent shortage of specialists with the relevant skills to navigate the choppy waters. 

Whilst delegating to third-party contractors may present the short-term solution in 2021, a clutch of available freelancers means talent sourcing will not be a straightforward strategy. Companies could find themselves in a wage war to land the specialists they need. 

Deloitte’s 2020 Global Outsourcing Survey lists accounting (37%), IT services (37%), digital marketing (34%), and development (28%) as the top reasons businesses outsource specialists. With lower budgets in 2021, hiring full-time employees may not be a practical solution.

• Cloud Migration 

Cloud services underpinned the global economy in 2020. Without the cloud, businesses would not have been able to deploy WFH strategies. On the plus side, the shift to managed cloud services does come with a bundle of benefits. 

Outsourcing data storage to a cloud service provider dramatically reduces costs by eliminating the need for in-house servers and the ability to reduce the number of technicians in your IT department. 

There are also technical advantages that empower firms to create secure environments, streamline workflows, reduce downtime, enjoy fast, reliable internet connections, support a mobile workforce, and enhance disaster recovery plans to name a few. 

However, migrating to the cloud is not as plain sailing as you would hope. Potential problem areas include misconfigured cloud servers, integrating legacy systems, compliance, and legal questions regarding proprietary technologies and hardware owned by 3rd parties.

Wrap Up 

 2020 was a tough year. Whilst the current covid crisis feels like a tornado, once the turbulence settles, companies are more likely to recognize the value enforced strategies offer. 

Whilst there is no denying that 2021 will bring its own challenges, acting on your business needs early puts you in a stronger position to navigate common problems. If you procrastinate, businesses that are on the front foot will reap the rewards.