this year has been tough for small businessess

This year has been tough for small businesses.

The more I interact with founders and leadership teams, the more I find a common thread of challenges that have hit SMEs and internet businesses due to global economic and geopolitical situations.

While the macro state of affairs can have strong and gut-wrenching effects on a business, here are a few things which I have learnt from founders – things that keep them going:

1. Building Emotional Resilience

Someone playing the long game knows that macrocycles will come and go. As there are downward anomalies, there will be upward ones too, and to milk those upward curves – it’s crucial to build a strong foundation for yourself and your organisation.

Building roots which can withstand the test of time and cycles.

2. Building Trust

Many internet businesses have been woven around bringing changes in consumer behaviour. Be it the food delivery space or the upcoming sustainability sector.

We are building more products and services that require consumers to adapt and change from their usual habit patterns. It’s essential to nudge these changes sustainably and not just via price-based levers.

If the consumer has the answer to what, why and how – they are likely to stay with you for the longer term, i.e. higher LTV for the business.

3. Focussing on the bottom line

While for VC/PE-led ventures, velocity and scale are of utmost importance – because that is how an investor can derive x amount of returns in a short period.

For SMEs building long-term, it is vital to be vigilant with their bottom line and the gross and net margins.

The growth levers, which seem to have a higher ROI, only have that ROI for a shorter span of time.

Identifying levers which will offer a consistent ROI for a longer term (more than a decade) will be more valuable than a short-term lever.

Because of the magic word: compounding.

The shift in tides because of the macro scenario is likely to last for another twelve + months. Macro scenarios will continue to evolve.

Meanwhile, we need to hang in there and continue to sustain and grow sustainably.

And let’s not forget the Indian synonym for compounding: Jugaad.

Keep going ๐Ÿš€

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