6 pandemic-related challenges businesses still face—and how to overcome them

More than two years into the coronavirus pandemic, small business owners still face unique challenges. Though mandated business shutdowns have largely stopped and disruptions to operations are less frequent, business owners are still living in the shadow of the pandemic. 

Mixed with the uncertainty and fear, however, is a healthy dose of hope. Over three in four (77%) business owners surveyed in the US Chamber of Commerce Small Business Index for Q4 2021 said they feel optimistic about the future of their business. 

Running your business during a tumultuous cultural and economic time has likely made you more resilient and confident that you can handle whatever the future brings. Here are the top six challenges businesses are experiencing—and what you can do to overcome them: 

1. Bringing in enough revenue

One of the biggest challenges businesses face—any time, but especially during a global pandemic—is earning enough revenue to remain stable and profitable. Seventy-one percent of small business owners surveyed by Goldman Sachs in January 2022 said this year’s initial rise of COVID cases negatively affected their revenue. 

There are countless internal factors that affect your business’s revenue, including your business model, offerings, pricing, and cash flow management, but there are also factors outside your control. Public health announcements, changing business regulations, cultural trends, and evolving consumer needs all play into your ability to bring in consistent revenue. 

How to generate more revenue

One way to improve your revenue is to be more strategic about your spending. You can:

• Cut expenses with a low or moderate ROI: Eliminate unnecessary expenses so you can double-down on more costly investments. 
• Narrow your customer focus: Figure out where you get most of your revenue from, then focus your attention there. For example, if the majority of your revenue comes from loyal repeat customers, consider scaling back on marketing to first-time customers. Instead, focus on improving the customer experience for repeat customers with more personalized promo emails or rewards programs. 
• Pick one or two revenue streams: If you offer multiple services or products, consider pausing production on some, so you can put more cash and energy into your top money-making offerings. 

2. Supply chain issues

Supply chain backups over the last two years have caused business owners a lot of time, money, and stress. Sixty-one percent of business owners from the Small Business Index said the pandemic dramatically disrupted their supply chain. The result: inventory shortages, drops in sales, and lower customer satisfaction. 

Businesses are still struggling to maintain normal production processes and obtain the materials they need. What’s more, only 13% of business owners surveyed by Goldman Sachs said they expect supply chain issues to lessen in the next six months. 

How to protect your business against supply chain problems 

The best way to avoid supply chain issues is to develop a Plan B (and maybe Plan C) for every possible situation. You could:

• Secure alternate or backup vendors: Find vendors and suppliers who operate from different locations or have different processes that would make them more reliable. 
• Rethink production: Look for ways to shorten or streamline your production process, like using software or outsourcing shipping work to a bigger company. 
• Stockpile inventory: Using your sales forecasts and inventory management software, figure out how much inventory to purchase ahead of time and keep as backup. 

3. Dealing with high inflation

Inflation in the United States is alarmingly high—and many small businesses are struggling to adjust. Seventy-four percent of small business owners surveyed in the Small Business Index said they’re concerned, and 71% said the steep increase in prices has significantly impacted their business over the past year. 

Not only is cash flow tighter, customers are also more wary with their spending. Business owners are trying to find the balance between raising prices to cover the higher cost of business expenses and keeping customers satisfied. 

How to combat inflation

If you’re experiencing the negative effects of inflation, you may need to make some big changes. You can:

• Get a business loan: Invest the funds back into your business by buying inventory in bulk, launching a new marketing campaign, purchasing real estate, or hiring additional employees.  
• Adjust your pricing: Consider increasing the price of your most popular offering, but make sure to offset it with other offerings or options. 
• Adopt new technology: Invest in equipment or tools that improve operations and boost efficiency. Cut manual tasks, automate everyday processes, and gather more insight into your sales or inventory. 

4. Dealing with shifting COVID protocols 

One in five business owners (21%) said COVID compliance is their top concern, according to the Small Business Index. As a business owner, you don’t just have to stay up to date on recommendations from the Centers for Disease Control and Prevention (CDC), you also have to pay attention to state and local government mandates. On top of that, and perhaps most importantly, you have to address your customers’ safety concerns while also accommodating your employees’ needs and work preferences. 

The emotional and logistical labor of making last-minute changes related to masking, signage, business offerings, or employee communication can take a toll on even the most organized, adaptable business owners. 

How to adapt to COVID compliance changes

There’s no one single strategy for successfully adapting to changing safety regulations. By this point, you’ve likely already made big changes to your business and worked in a variety of different conditions. Now, staying on top of the changes is all about being prepared but flexible. If you haven’t already, try the following: 

• Set up Google Alerts alerts for news items related to your industry, city, or business type, so you’re always in the loop. 
• Set up a recurring staff or employee meeting where you can share updates or answer questions. 
• Draft a handful of different email updates you can send to customers to share relevant business changes. 

5. Finding and retaining qualified employees

It’s getting increasingly difficult to find and attract great talent during the labor shortage. As of January 2022, there are currently over 11 million jobs available in the US, according to the US Bureau of Labor Statistics. A whopping 87% of business owners surveyed by Goldman Sachs said they’re struggling to find qualified candidates to hire, and 97% said this struggle is impacting their bottom line.  

Finding qualified job candidates, while tedious, is just the first hurdle; you also have to compete with other businesses for those employees. 

How to attract and retain great employees

The key to attracting and keeping qualified employees is to get creative—with your recruiting process and with your employee offerings. Try the following: 

• Write a compelling job ad: Paint a clear picture of an employee’s responsibilities, eliminate exclusionary or gendered language, and list the pay range and benefits you’re offering. Make sure you distribute the ad in a variety of different places, including job search engines, online communities, and niche groups.  
• Attract positive attention: Consider sending out a press release or pitch to a journalist about something exciting your business is working on. You could also start a local donation campaign or host a community event. 
• Expand your offerings: Find better ways to support your employees at work and beyond. Consider raising your hourly wages, adding mental health benefits, and giving employees flexible hours or more control over their shifts. 

6. Planning for the future

With over two years of constant change and unforeseen obstacles, business owners are having a tough time planning for the future. Operating amidst economic uncertainty makes it tricky to forecast growth and set realistic long-term goals. 

If you’ve drastically changed your business model or offerings to survive the pandemic, you might be wondering if you’ll ever be able to revert back to your former state—or how you’ll move forward if you don’t. Or maybe you’re trying to figure out how to stay relevant as new consumer trends take hold. Or maybe business is booming and you’re exploring options for expansion. 

How to plan for the future amidst uncertainty

Here are some ways to protect your business as you look forward: 

• Set one growth goal at a time: Focus on one realistic growth endeavor at a time, and evaluate your progress as you go.
• Create contingency plans: Write out a few different worst-case situations, then create plans to deal with them. That might involve stockpiling inventory, for example, or getting a business line of credit to deal with temporary cash crunches. 
• Tighten your finances: Consider meeting with a business accountant to go over your finances and look for ways to invest, reduce your debt load, or improve profits. 

The businesses most likely to succeed

A growing reliance on digitization and accessibility means certain industries and business models are primed to do better than others right now. Ecommerce, food delivery, home improvement, home fitness, and cybersecurity businesses are just some of the most promising business types. 

However, business owners across every industry have the potential to do well, as long as they have the right tools and capabilities. The businesses most likely to succeed are:

• Adaptable: You have to be resilient in difficult times, and willing to shift course when needed.  
• Innovative: You need to think creatively about how to satisfy customers and stay competitive. 
• Connected: You have to be connected to your customers’ needs and to your own values and purpose as a business.  
• Employee-driven: It’s not enough to only take care of your customers; you also have to invest in the people who keep your business running. 

If you need help preparing for the future, consider applying for a Funding Circle business loan. Our business term loans are flexible and affordable; they’re built to grow with you, so you can stay focused on the future. 

¹ 10 Business Types That Will Remain In Demand Post-Pandemic, US Chamber of Commerce, September 20, 2020.

asdfad