Are small and medium-sized businesses ready for a comeback?

How have small and mid-size companies weathered the global pandemic? We surveyed 3,000 business leaders to get a pulse on how 2020 changed the way they work, for better or for worse.

2020 pulse survey of small & medium-sized businesses

Key findings

  • 87% report changes in levels of business activity due to the global pandemic.
  • 75% agree that relationships with their customers have changed.
  • 90% agree that more digitally-focused working environments are the future of the way we work.

How 2020 changed business

Lockdowns, distributed workforces and business continuity – the global pandemic created some big challenges for small & medium-sized businesses. Despite signs of recovery, many managers and leaders are looking to the future with uncertainty. Has the pandemic changed business forever?

To better understand the current climate, Dropbox teamed up with VasonBourne to conduct an independent survey of business and IT decision-makers in the UK and US across a range of revenue sizes and industries. Read on for how companies are navigating the road to recovery and learning how to rebound from crisis stronger.

Business as unusual

87% reported changes in business activity.

After our initial wave of interviews last June, it was pretty clear that small and medium-sized businesses faced some historic challenges. 51% reported a decrease in business activity, with many at risk of reducing staff or closing up shop.  

Remote work, business continuity and productivity were the most concerning problems. Small businesses in the US alone employ over 60 million people and play a big part in job creation and economic growth. The pandemic left many leaders wondering how they would weather an uncertain future.

Different industries. Different impact.

While hospitality and leisure were especially hard hit by COVID-19 restrictions, tech industries saw more positive numbers. In June, 51% reported an increase in business activity. By August, that figure was up to 57%. This rapid increase seems to point to the growing significance that technology has in our daily lives, especially as more organisations adopt video conferencing, email and IT tools.

A brighter outlook

Our second wave of the survey in August revealed some better news. More organisations reported increasing levels of business activity and signs of possible recovery. 

How did businesses manage to keep doors open, employees busy and customers happy? While the easing of restrictions certainly played a part, many businesses resorted to smarter ways of working. They were forced to innovate.

Is flexibility the road to recovery?

Despite all the challenges and setbacks, profitability and growth remain top business priorities.
Because the path to recovery is still unclear, businesses must be flexible so they can quickly scale their organisation to changes in market demand, new ways of working and shifts in customer behaviour. 
By investing in IT/collaboration tools, businesses can focus on increasing productivity during the downturn.
When the outlook changes and opportunity knocks, they’ll be more than ready to strike. According to our survey, 87% of small & medium-sized businesses agree that collaboration tools are key to supporting business growth.

Remote work

Roadblocks in collaboration are slowing down businesses

Teamwork is getting tougher

When businesses sent employees home to comply with COVID-19 safety measures, many were unprepared for the sudden transition to remote work. How do employees coordinate on projects when they’re not even in the same room? Our survey indentified some key hurdles.

Top 3 remote work challenges

1. Making sure teams can work together
69% report that “documents and conversations that don’t connect and spread across different platforms make work harder”. When employees struggle to collaborate, productivity declines.
2. Measuring productivity
When managers don’t see their teams face-to-face, it can be hard to make sure they are completing tasks efficiently. Are employees focused, motivated and on track?
3. Maintaining a strong work culture
Work culture is a big part of motivating, attracting and retaining employees. Without a physical space for employees to interact and socialise, how do you foster a positive company culture?

From remote work to teamwork

A tight-knit work culture is the heart of Team Epiphany

A tight-knit work culture is the heart of Team Epiphany

When all 80 employees of this marketing agency started working from home, owners Coltrane Curtis and Lisa Chu kept the business alive by embracing the talents of their team and reinventing real-life events as digitals experiences. They were able to nurture team culture and creativity by being flexible and innovating new ways of working together. Learn more about their story.

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Pioneering a work-from-anywhere culture

Pioneering a work-from-anywhere culture

When the Cameo video sharing app began seeing explosive growth during the lockdown, CEO Steven Galanis seized the opportunity to do things differently. Cameo is doing away with the office all together and building a stronger team as a result.

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Flipping the script on distributed work

Flipping the script on distributed work

When COVID-19 shut down the entertainment industry, film production company Array turned a setback into an opportunity. Learn how their President, Tilane Jones, was able to pivot the business and unite the team.

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Helping millions go back to school

Helping millions go back to school

When schools around the world shut down due to the pandemic, Sal Khan had to quickly create resources to help parents, teachers and students pivot to virtual learning. Learn how Khan Academy grew their business to meet real-time need.

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Digital transformation

Remote work is fast-tracking innovation

When the distributed workforce emerged as the new normal, businesses needed to quickly bring teams together to keep work flowing. 

Suddenly they were embracing video conferencing, project management tools and digital workspaces. Last June, 74% of survey participants said they were using existing IT/collaboration tools in ways they never thought of before. By August, 58% reported that the pandemic had served as a catalyst for digital transformation, with many planning to expand their IT budgets.

An enlightened way of working

 
The unexpected jump to digital tools may have been a struggle at first, but it has opened people’s eyes to the possibilities. They’re not just some cool features to play with but critical tools that can improve workflows, unlock creativity and grow business.

Tomorrow Lab is an award-winning group of designers and engineers who create revolutionary technology products. Collaboration plays a key role in their innovations. Tools enable the team to seamlessly combine design, technology and engineering processes into their workflows. Even when COVID-19 safety protocols forced the company to work online, it didn't disrupt their performance. They could leverage smarter ways of working by using videoconferencing for daily stand-up meetings, screen sharing for reviews and sketching sessions and Slack for everyday workday communication.

“There's no such thing as thinking in a group. Collaboration requires tools for people to merge individual ideas and create something better.”
Tomorrow Lab

Customer experience

New rules. New customer behaviours.

75% agree that relationships with customers have changed.

The crisis has made rapid and lasting changes to customer expectations. Due to restrictions and safety measures, people resorted to researching and making purchases online. Even before the pandemic, 67% of the buyer’s decision journey was digital. This number will only increase as customers get used to the convenience and wider range of options. How do businesses stand out and stay competitive? Organisations must prioritise the customer experience.

Does your team have the tools to work together?

 

92% agree that effective internal collaboration is key to delivering a successful customer experience.

Key findings

Biggest customer service challenges

  • Maintaining strong relationships with current clients
  • Creating strong relationships with new online customers
  • Providing a strong online experience
  • Providing effective support via digital channels

How to improve the customer experience

The rapid increase in digital adoption is actually a big opportunity. Online channels can help businesses reduce costs, expand market reach and communicate more effectively. But they need to act quickly to get the competitive advantage. Creating a strong online presence is more critical than ever.

 

  • Use live chat to improve customer support.
  • Get in touch with new and current customers via social media channels.
  • Make sure your website is mobile-first and user friendly – people are using their mobile devices more than ever. 

Making digital more personal

Revival Retro is an independent, award-winning fashion business reviving 1920s to 1940s glamour. After finding initial success as a physical store in London, the brand soon realised they needed an online presence to be more competitive and grow. Read more about their story
“I pride myself and the business on establishing lasting relationships with our customers. I figured that using the right technology, we could adopt that policy online; creating an online shop that felt like a physical shop. The success of our online business has been transformational and the prospects for the future look very bright indeed. Social media, community and great imagery is the foundation that this has been built on, and Dropbox Business is helping us manage it all.”
Rowena Howie, Owner Revival Retro

Beyond the pandemic

Rebound from crisis stronger

90% agree that digitally focused working environments are the future of the way we work.

The global pandemic brought a seemingly overnight change to how we all work and collaborate – both with our teams and with our clients. There’s really no going back. IT/Collaboration tools are not only facilitating recovery but also meeting business priorities and prompting unique benefits for organisations, employees and customers.  

Today, every business is experiencing accelerated change. We have to transform to remain relevant to customers now and into the future. Innovation is essential, and every digital investment we make stems from the needs of the tens of millions of customers we serve.

Catherine Hamilton, Business Performance Director, Post Office

How we work may never be the same

Many businesses are trying to learn from crisis and come up with a better workplace. While some have announced hybrid models that combine the office with remote working, other companies are doing away with the office altogether. Both could lead to exciting new benefits like lowering costs, creating access to a greater pool of talent and fostering a better work-life balance for employees. But it’s really just the beginning. The bottom line is that businesses must innovate to stay competitive and rebound stronger once the pandemic subsides. By adopting more flexible schedules, locations and tools, they can shape a new culture of work and embark on a new era of growth.

How does your organisation measure up?

Take our quick benchmark survey to see where your management of current business challenges compares with other small and mid-size organisations.

About the research

VansonBourne
Surveyed 3,000 business and IT decision-makers in the UK and US. The interviews were fielded in 2 waves – June/July and August.
Participants
Represented medium (250-2499 employees), small (20-249 employees) and very small (2-19 employees) organisations.
Industries
Included technology, construction, retail, finance, hospitality and manufacturing and comprised of a range of revenue sizes.