We inhabit a rapidly transforming world. Advancements in technology, management theory, and efficiency are changing year on year and the best business ideas that can take advantage of this are thriving. The only option you and your business have is to change with it or become threatened by the businesses that do. The best approach is to recognize the rapid stride of innovations confronting us and to adapt at the same pace.
If you own a small business in NZ, here are some statistics to guide you.
Small Kiwi start-ups with no employees that originated in 2010, according to MBIE did not exist by 2015. The figure slightly improved to 43 percent for businesses with 5 or fewer employees.
A disproportionately large number of start-ups rarely move beyond the early phase with 37% of micro-businesses failing after two years, according to Statistics NZ The importance of future-proofing is evident here.
Small businesses in New Zealand and businesses across the world fall behind when they fail to match the expected pace of change. It may end up in their unfortunate closure. It need not happen that way if you take steps today to avoid the disaster tomorrow. A crucial first step in avoiding disasters is the right insurance for small businesses to protect against unexpected events.
Why Businesses Remain Unprepared for Future
Fear of Change
Fear is the primary reason some business leaders refuse to adapt to change. The rapid change intimidates them and the basic human instinct compels them to retreat. Entrepreneurs and CEOs end up using all their energy defending or preserving the past methods and strategies.
Some small businesses are too relaxed in their comfort zone to change. They mistakenly believe that what worked in the past will work now. What proved successful yesterday will work tomorrow is the most erroneous business strategy today.
Many CEOs and entrepreneurs find future-proofing too daunting. They lack energy and motivation, even if they recognize the need to change. They are busy and comfortable struggling with current issues to think of tomorrow and let the business slowly erode.
Failure to Listen
Some businesses are simply blinded to the employees, the customers, and the marketplace. They don’t listen or see the ongoing changes in the environment. They wake up only when their competitor walks away with a better solution. Small businesses often fail to invest in research and fail to foresee the future.
There are several more reasons businesses fail to respond to change. They possibly fail to apply the learning, data, information, and resources they have. When the organizations grow too big, the business leaders often suffer from a delusional point of view that could be an obstruction in the journey to change. It doesn’t require a huge resource to invest in the desired change. In fact, the change begins with the change in attitude and mindset.
How to Future-proof Your Business
Here are some ways to future-proof your business:
Don’t Depend on Single Product
Even if you have a great product, your cash cow, don’t depend on it alone. Diversify your product portfolio. There are examples of e-commerce businesses like Flipkart and Snapdeal that have expanded to include logistic wings in their companies.
Past Strategies May Not Work
What helped you in the past to get you here may not work in the future to get you there. For instance, print ads might have helped a business acquire customers in the past. It might not work in the age of social media. Think of new ways to acquire customers.
Foresee the Future Demands
Your customers will not always indicate what they want. You have to foresee the likely direction of demands in the future. Many people thought Ford cars won’t work. People at that time might have wanted faster horses. Henry Ford could foresee the future demands and be successful.
Risk Management Strategies
You may not likely foresee challenges arising in the future, but you can always prepare yourself to be ready to combat the future challenges. The first thing you need is to identify the possible areas where challenges might occur. It could include some among several things like data security, legal compliance, business processes, and people among several more. You need to identify the gaps in these segments and take steps to mitigate them.
Keep Your Ears Grounded
Pay attention to customers even if you are too busy developing products and processes. Observe the changes in customer behavior. Listen to their questions and comments. Listen to their needs and try predicting the likely changes in their buying behavior.
Keep an Eye on Top Competitors
This is the easiest exercise to keep you ahead in the game. If you watch your best competitors closely, you can outsmart them with better solutions before they do it.
Importance of a Clear Vision
A clear vision means an open mind. A healthy level of insecurity might impart this vision. Ask yourself what could go wrong, and what their business might look like in the future. Ponder over challenges, opportunities, and future consumers. That’s how you can develop the vision of your company in the future.
The world we live in is changing at quite a faster rate. What is novel today becomes obsolete in 6 months. The businesses that fail to match the pace of change are fated to lose. However, there are solutions to keep track of the change and move along with it. It is best to introspect why a business suffers. The failure of other businesses comes with lessons that best businesses follow. There are several ways you can be future-proof your business.