Last weekend, I wanted to watch a movie with my family. My wife was constantly asking me if I booked the tickets. I took my phone out from the pocket, opened the BookMyShow app and booked the tickets in few minutes. As I avoid driving during rush hours, I also booked a cab with couple of more clicks. Weekend is also when we need to stock up the grocery. So, opened the BigBasket app and ordered regular household stuff in less than 10 minutes.
What seems to be a normal behaviour today was not even a distant dream just 2 yrs back. Things have changed dramatically and it not only affected my behaviour as a customer, it caused an significant impact on the businesses as well.
Lot of business had to either change the way they work or shut down due to these fast changing environment. This brings us to an important question – Can we future proof our business? Can we increase the chances of business survival?
We can’t predict the future but we can definitely prepare our business to face unforeseen challenges. Here is a list of 8 strategies that can help you to future proof your business.
1) Don’t depend on one part of your business for complete success
Most companies achieve success with just one great product. It could be for a niche market or a mass market audience. Even if its very popular and responsible for generating almost entire chunk of the total revenue, you must think about other ways to diversify your product portfolio.
This strategy might contradict with the common business advise of focusing only on one area of your business. However, in order to increase your chances for survival, you must reduce your dependence on one part of your business. When TRAI (Telecom Regulatory Authority of India) restricted the bulk SMS limit, lot of SMS marketing companies suddenly went out of business. So, to future proof your business, you must create a diversified product portfolio.
New products could be line extensions for the existing business. For example, eCommerce marketplaces like Flipkart and Snapdeal have also built logistic companies that form a natural extension of their existing business. Flipkar even tried to build a payment gateway – PayZippy which was discontinued after some time.
2) Rethink your Past strategies that may fail to engage new customers
I’ve read it somewhere that “What got you here, won’t take you there”. This simply means that the strategies that you used to acquire existing base of customers may not be useful to acquire new customers in future.
For example, a lot of businesses depend on print advertisements to acquire customers. With the rise of social media and new avenues like ‘Search Engine Marketing’ and ‘Inbound Marketing’, things are going to change for sure. Your old strategies will no longer work and you might struggle to acquire new customers if your don’t adopt to new ways.
I live in Pune and I’ve seen how real estate developers are now shifting to digital advertising platforms like YouTube and Google Adwords to promote their new businesses and relying less on newspaper ads.
3) Predict the future demands today
When Henry Ford made cheap, reliable cars people said, ‘Nah, what’s wrong with a horse?’ That was a huge bet he made, and it worked.
So, your customers can’t always tell you what they want, you have to anticipate it. This needs some imagination and experience with the trends of industry you work in.
4) Identify & start managing risks
You won’t be able to predict the problems that might occur in future but you can certainly take some steps to better prepare yourself. First, we need to find the risks or possible point of failures for our business. These risks could be in areas like people, system or business processes, legal compliance, data security, etc.
If you are depending too much on a single person, vendor or a small group of people for the success of your business, then you might face big problems in future when these people are not around. Similarly, you need to find out the gaps in your business process and address them before those turn into problems. Depending on the business, these can be about purchasing new material, customer support, quality of deliverables, etc. You are the best person to identify the risks in your business and take measures to mitigate them.
Another important point which is often ignored by businesses is data security. For some businesses, data is everything and if they lose it because of some reason, they have risk of going out of business. Find out if you have adequate security measures. Here is an article that tells you how your business data is more secure in cloud.
5) Listen to customers & observer their behavior
Business owners are normally so busy with product development and sales that they completely forget their main stake holder – The Customer. In order to future proof your business, you should start focusing on the changes in customer behavior that might happen in near future.
Shopkeepers didn’t anticipate the onslaught of eCommerce players that started couple of years back and most of them went out of their business. Customer behaviour changed and they started to prefer buying online due to various reasons (convenience, wide range, discount, etc). Sellers who predicted this shift in consumer behaviour started selling online along with their brick and mortar shops.
Similarly, you need to setup a system to track customer behaviour, you need to listen to their needs and considering the developments in your industry, you should try to predict the change in buying pattern.
6) Follow the trends in developed countries
I think, this one is the easiest of all the other strategies. To stay ahead in the game, you must regularly track whats happening in other developed countries related to your industry. There are numerous blogs are sites that can provide you this info. You can even create a Google Alert on the topic of your interest.
So, if you are into a business of selling Solar Panels, see whats happening in Solar Energy field in China or Germany. Uber was launched in US few years back, when it came to India, it shook the whole cab hiring business. Similarly, when video and audio streaming became popular in US, it was predictable that things will change in developing countries like India. So, businesses like BigFlix (DVD rental) had to rethink their future strategy. They soon stopped delivering the DVDs offline and shifted to online platform.
7) Watch for influencing factors surrounding your business
If you really want to future proof your startup, you need keep an eye on your surrounding. You must make yourself aware of the developments happening around you even if those are not related to your industry.
We all know how smartphones killed the camera industry. Camera and film maker – Kodak was once a billion dollar company. It failed to see the future and this 130yr old company had to file for bankruptcy in 2012. Apart from camera, smartphones are guilty for killing other successful products like music players, handy cams, portable gaming consoles like PSP, GPS devices, Paper Maps and telephone directories like yellow pages.
In case of ProfitBooks, we believe that the businesses would access their business data from any internet enabled device and that’s we consciously moved away from an offline software and built a cloud accounting software.
With faster internet, consumer habits changed dramatically and it affected lots of different businesses. You need to watch out for such influencing factors that can indirectly impact your business.
8) Create Favorable environment for innovation
Predicting future is not possible but we can get close to it. You can not always win by following the leaders, you have to innovate at one point to stay ahead in the game. Innovation is not easy and you might fail several times but once you hit the bull’s eye, you’ll leap ahead of your competition.
To foster the culture of innovation, you need to create a favorable environment for it. One way to do it is, give your employees freedom to experiment, send them to tech events and conferences in your industry and finally reward them for their work.
Things are changing fast in today’s business scenario and even a successful business can not guarantee its survival if its not prepared for the future. Using above strategies, you can future proof your business to some extent and stay ahead of the competition.
Please feel free to share your thoughts in the comment section below.
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