How to future-proof your business
We simply can’t know or control everything that happens in life. Over the past 18 months we’ve all had lessons in dealing with unexpected and challenging events. And yet, many of the UK’s small businesses are still powering on, focusing on their resilience and recovery.
To be successful in business you don’t need a crystal ball or an ability to predict the future – though of course that would be nice. The key is not in knowing exactly what will happen, but in how you’re prepared for change. There are a few tools every entrepreneur can have in their box to weather any kind of storm.
It goes without saying that business finance can help boost your cash flow. And having the right funding alongside a broader, more holistic survival strategy is key to holding onto success for longer. Here we’ll take a look at how you can future-proof your business and what you need to keep an eye out for along the way.
You may never want to read the phrase “uncertain times” again, but the truth is that the pandemic threw us all into survival mode. The concept of a pandemic or plague is not exactly unconventional (there have certainly been enough around the world throughout history). But with all the ease of movement and instant global access the internet has given us, having to operate under very different conditions was still a shock.
We’ve seen supply chains disrupted, and not just those delivering your goods. Global mobility has seriously affected many businesses, especially hospitality, whose workforce has shrunk. The businesses that have survived (and even thrived) have worked hard to hold on. Pivots require ingenuity and a lot of hours, and they’re something that successful entrepreneurs don’t shy away from when their business needs a new direction.
Businesses have always required adaptability and flexibility. Trends and technology change and consumers won’t stay loyal forever. Being able to remain relevant and fit new consumer demands and preferences is no easy feat, but it’s what you should always have at the back of your mind. Be open to change and embrace the doors it could open, rather than holding onto something that only works well for now.
You and your team need to keep conversations with your customers open and engage regularly. Although feedback might hurt sometimes, it’s so important to the growth and direction of your business. Depending on your industry there could be verified sites like Trustpilot or TripAdvisor, so encourage your customers to leave a review. Just make sure you’re keeping on top of them and addressing any issues with customers and within the business.
Your social media channels are another forum for feedback. People tend to be less reserved here and will give you their honest opinion (for better or worse). Don’t just ignore negativity. These are the people who are driving your revenue, so you need to focus on offering them what they want. A business that is in tune with its customer base is better equipped to tweak and tailor their products or services and outlast rivals.
Do more general research on the market too. Read magazines and websites focused on your sector to keep up to date with the latest trends. Don’t be too quick to brush them off as fads. Your competitors might not, and they could end up taking away your market share.
“Disruptor” can be a bit of a buzzword, but we’re living in a time of fast-paced technological change and industries are being disrupted like never before. Five years ago would you have imagined being able to order dinner, rent and watch a film or sort your groceries for the next week all from the comfort of your sofa? Just using your phone and without saying a word to anyone? Stay ahead of the curve before you’re left behind because things are changing fast.
Diversify your offering to increase your chances of survival. At MarketFinance, we started with a single product, pioneering a brand new kind of selective invoice finance. Now, we offer a wide range of frictionless finance solutions including flex loans and business loans so that we can support even more SMEs in a variety of different ways. Our product team is always asking the question “what else could we offer or do for our customers to make their lives easier?”
If you look at change as an opportunity then you can have a long and healthy business life. When mobile phones started to replace cameras, Fujifilm diversified and adapted their business. Now they offer medical systems and semiconductors to businesses, as well as digital cameras. Kodak, once a multibillion dollar company, didn’t have the same long-term view and filed for bankruptcy in 2012.
There are other, more personal factors that can have a big and unexpected impact on a business. For example, if you were to fall ill, or another shareholder passed away, do you know what processes and structures are in place to manage the change?
Part of future-proofing is making sure you have protection against the unexpected. We spoke to Chartered Financial Planner, Matthew Young from Advanta Wealth about how founders and shareholders can prepare themselves.
“Protecting your business against these life events is the smart play. You are rightfully trying to protect future cash flows, share of market, ideas and innovations. Back that up with protecting those key individuals or shareholders in the business in case of death, illness or disability”, Matthew told us.
To set your strategy, Matthew suggests asking yourself:
- What happens to your company debt if you or a shareholder dies? Will the business be able to keep up repayments?
- If you rely on key individuals to drive your growth, what happens if they’re no longer a part of the business or not able to work due to illness or disability?
- If you or another shareholder were to die, who is the replacement? Are you comfortable with a family member taking a controlling share?
“Even a small amount of cover is better than having none at all”, Matthew advises. The right business protection is there to safeguard everything you’ve worked so hard to build.
Another thing we can’t control is the weather. With global warming we’re seeing stranger weather patterns than ever before, and more of the UK is at risk of flooding. On top of that, if you use factories or distributors around the world, consider the kinds of natural disasters that could affect them and what it would mean for your own supply chain.
Aside from quite literally saving for a rainy day with a cash buffer, it’s also helpful to have a natural disaster plan. If you don’t have one then don’t panic, now’s the time to get thinking. First of all, collect the numbers of any official channels you might need to contact in case of an emergency. Make sure your health and safety training is up to date in case anyone needs assistance. And of course make sure that you’re regularly backing up information and documents on external harddrives that are stored securely and out of harm’s way, if possible.
What kind of disaster insurance cover do you have? Will it cover lost stock and business opportunities or just damages. Taking the time now to explore your options puts you in a stronger position when you want to reopen after a disaster has forced you to close.
Cybercrime is on the rise, and with more companies operating digitally than ever before (thank you lockdown), the stakes are even higher. Update your software weekly and make sure you invest in security programmes. Take time to review how well these are functioning and make sure you keep up to date to protect against potential threats.
You’ll want to enable data encryption to protect all your information, including your customers’ details. Having a straightforward plan in place to help you deal with any security breaches will make things easier and less stressful for you to sort if something does happen. If someone in your business accidentally clicks on a phishing link or has their work account compromised, make sure you know who will fix the problem and who can communicate with any affected parties.
By now it should be clear that even the most successful of businesses need to adapt and change over the years. The best way to think about this is to move away from simply being reactive to being proactive and planning ahead. Having the right strategy, protection and finance in place can make you more resilient and strengthen your position over the years to come.