How Small Businesses Stay Competitive in a Challenging Economy

In the world of ever-changing business trends, companies of all sizes know one thing is certain: Staying ahead of the competition leads to success.

Prior to the COVID-19 pandemic, Kanga Coolers relied heavily on retail and custom orders. Only one-third of its business came from the e-commerce market. When the pandemic swept across the U.S. and shut down many retail stores, sales plummeted.

Fortunately, as a 2020 FedEx Small Business Grant Contest winner, Kanga Coolers was able to find stability again and keep growing, despite uncertainty in its industry and the economy overall.

“The FedEx Small Business Grant hit at the perfect time to give us a little ‘breathing room’ while we transitioned from a …retail-dominated business to an e-commerce-led business,” explained CEO Logan LaMance.

The funds Kanga Coolers received helped launch its e-commerce market into a successful margin. The grant also allowed the company to connect with other businesses and leverage networks and insights – things it may not have had access to without FedEx.

After growing the business three times its size post-pandemic, LaMance and his team have learned how to gain a competitive edge as a small business through times of uncertainty. Here’s how they’ve taken advantage of new opportunities to promote company growth.

How to stay competitive in times of uncertainty

Though it may seem counterintuitive in an uncertain economic climate, staying competitive requires a commitment to growth. LaMance shared a few ways Kanga Coolers has grown since winning the FedEx Small Business Grant, which, in turn, has helped the business stay at the forefront of its industry.

Grow your team

When your business is ready to grow, your team should be as well. Ensuring your business has all the help it needs makes a big difference when it comes to meeting your customers’ needs. While hiring staff is an investment, it frees you up as the business leader to focus on more strategic tasks.

For instance, LaMance had previously designed all of the Kanga Coolers products, managed the company’s factories, organized freight deliveries, managed the warehouse, and assisted with the website for e-commerce business. As the company grew, he realized each of these aspects of the business was complex and needed the attention of additional employees.

“It’s super important for entrepreneurs to learn how to hire appropriately and delegate responsibilities as those areas demand more bandwidth, time, and resources to succeed,” LaMance said. “If you fail to do so, each area will become underserved and performance will deteriorate, resulting in stifled growth and stagnation in the business.”

LaMance noted that a business will only grow as fast as your team, and this has proven to be true for Kanga Coolers. “The expansion of our team has been the single greatest factor in increasing our competitiveness and ability to meet customer demands,” he told CO—.

Seek out networking and PR opportunities

A business’s connections, collaborations, and relationships can foster growth, resilience, and the longevity of the company.

In addition to the networks and insights of other businesses that Kanga Coolers was able to utilize through the FedEx Small Business Grant, LaMance said the grant provided the company with PR opportunities that boosted their organic awareness in the market.

“We’ve received many features on various podcasts that FedEx sponsors, [and] we even won our logo placement on Denny Hamlin’s FedEx NASCAR at Talladega in 2022—which was such a surreal experience,” LaMance said. “All of this combined allowed us to get in front of more potential customers and increase our share of mind in the cooler space.”

Make technology and system upgrades

LaMance shared that FedEx has been a large contributor to the growth of Kanga Coolers after winning the grant. He said the company received technology incentives to upgrade its systems and software to better support its needs.

“At our stage of growth, we need to focus on increasing our internal efficiency with systems, processes, and procedures that reduce operational friction,” LaMance shared. “Usually, systems break every time a business scales up by three.”

Because of those technological hiccups, LaMance said Kanga Coolers needed to focus on its strategic positioning within the market. The goal was to create a sustainable customer acquisition model that can scale for years to come.

“Increasing innovative product offerings, brand presence, and physical store footprint among other things will help propel the Kanga brand forward.”

Cash flow considerations when pursuing funding opportunities

One of the most important things a business owner can do for their cash flow is capitalize on any opportunity for grant money to give their business some breathing room.

LaMance said focusing on building a healthy cash flow model early on will allow you to get approval for better financing and need less external financing to produce growth down the line.

When it comes to equity, LaMance said it serves a purpose—but it should be taken seriously.

“It will likely end up being your most expensive form of capital in the long run,” LaMance explained. “Make sure the partner is strategically aligned with your business and ensure you’re comfortable with how things will operate over time with success.”

While a robust cash flow helps ensure your business has enough resources to support things like team expansion and technology upgrades—and leads to sustainable growth—finding the right funding opportunities for your business is what matters most.

As LaMance said, “Grants are free, loans are risky, and equity is the most expensive form of capital.”

Learn more about FedEx’s small business services.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

Published October 03, 2023