As we have seen in the last year, the future is unpredictable. You never know when a major event is going to pop up and disrupt your plans. It is something you should prepare for even if you don’t know when the event will happen.
This is true for your personal financial life. You need to have an emergency fund in place to pay for unexpected events.
But it is also true for those who run their own business. The steps you take today will determine how well your business can face unexpected challenges.
The pandemic is a perfect example of how unforeseen challenges can disrupt the status quo. It really shook up the business world. Research is showing that 91% of businesses have adopted some form of digital strategy as a way to future-proof their business from issues like the one we just faced. This is just one way that companies need to adapt to an ever-changing world.
So what plans have you set in place to guard your business against a drastic economic shake-up? Can your company survive in any unforeseen circumstances? If you are not sure, then consider a few of these practical and effective ways to protect your business against unforeseen situations in the future.
How to Future Proof Your Business
If you want to protect your business from failing, you might try some or all of these strategies:
Identify and manage risks
One of the worst mistakes an entrepreneur can commit is to ignore an identified risk to a business. The best way you can identify risks is to carefully assess your daily operations. Your goal is to find weaknesses that could cause harm to your business.
Risks may not always be obvious. They can be concealed in routine activities and remain unnoticed for years until something happens. So it’s important to leave no stone unturned in this effort. And if you find something ugly underneath one of those rocks, don’t ignore it. Address it and make things better.
Common areas where risks are frequently found are in financial operations, legal compliance, people management, data security and business systems. For example, depending on the type of business you run, you’ll find it vital to have more than one supplier. Getting your materials from one source is a potential risk due to the high probability of disappointments when they’re not in operation. However, having more than one supplier will save you from delays and problems that come with a single supplier.
Insurance
You really can’t run a business without business insurance. Just like in your personal life, this provides the protection and cushion you need against financial disaster. It does require a financial commitment to purchase the package you need. However, that cost is nothing compared to what you stand to lose without it. For all businesses, insurance minimizes risks and offers peace of mind.
The temptation to forgo a business insurance package is due to the misconception of having nothing significant to lose. However, that’s not the case. Remember that your objective is to future-proof your business. Therefore, should you face an unforeseen event such as a fire, a well-selected insurance package will provide financial protection.
Without it, all your hard work over the years will go to waste. Besides, a business insurance package is not meant for your business alone. Your employees and every other relevant thing connected to the business matters also.
Related Content: Insurance: The Black Sheep of the Personal Finance Family
Be aware of influencing factors in the business world
As a forward-looking entrepreneur, it’s essential to keep an eye out for external factors which impact the business. A typical example of this point was battle between the smartphone and the camera industry. For several years, Kodak maintained its place as a billion-dollar company only in competition with itself. However, when the smartphone made its entry into the consumer market, it all went downhill for Kodak.
After 130 years in the photography business, the company finally filed for bankruptcy in 2012. According to several business experts, if Kodak had been proactive on how the smartphone would influence the camera business, things could have been better for them. Although Kodak wasn’t into phone manufacturing, their main business, camera and photography, was threatened by this new technology. Subsequently, their company was toppled because the smartphone offered consumers a chance to take photos with their phones. Apart from putting camera manufacturers out of business, the smartphone also affected other products like paper maps, music players, and telephone directory companies.
This is a clear example of why you must be aware of changes within the business world. A competitor being in a different market niche doesn’t mean their products or services can’t put you out of business. Therefore, be mindful of what goes on around you as you look for ways to remain relevant.
Create a favorable environment for novelty
In business, innovation is key. Your business needs to embrace this to be ready for the future. Innovation helps businesses stay ahead of the game, especially in a competitive market.
However, it’s not always cast in stone that a new product or service will be successful upon its first entry into the market. That’s why to keep the motivation up and running among your employees, it’s necessary to give them room to experiment with new ideas.
Another way to create a favorable environment is by sending your employees to tech conferences and other industry events focused on innovations. Fostering the innovation culture is beneficial for business relevance in the future.
Understand the importance of business agility
Business agility refers to a company’s ability to respond quickly and effectively to market changes and developing opportunities. Using the Covid-19 pandemic as a reference point, businesses with agility quickly adapted to the digital move and remained in business. On the other hand, those that couldn’t manage that lost a great deal of business. Many even failed.
Usually, companies with agile operating models are able to overtake the competition. They find ingenious ways to stay relevant at all times. Companies with this business trait engage employees better and have higher loyalty rates among staff. Once an employee gets a sense of their job security, the chances of them staying longer can help future-proof your business. Long-standing employees can be worth your while, especially when you do not have to retrain new staff.
Focus on new skills acquisition
If you have to future-proof your business, you can’t do so without effective and efficient digital skills. According to business technology experts, the world should gear up for a more radical shift to digital work. Businesses need good judgment to thrive, and that’s where new skills come into the picture.
In a study conducted by Dell Technologies, respondents admitted that skills could become stagnant. For this reason, they advocated the need for companies to invest in new skill training or to upgrade the existing ones on a regular basis.
Many believe that digital skills will eventually replace a large percentage of the workforce. However, a few others subscribe to the belief that it can unlock human potential. Regardless where you fall on this issue, digital skills are necessary and are here to stay. You could say these digital skills give a glimpse into the future of work. And what better time for your company to get accustomed to it than now?
Related Content: Your Best Investment Ever Won’t Be in the Stock Market
Diversify the workplace
How diversified is your workplace? Is your business space still plagued by stereotypes and a lack of opportunities for minority groups? If so, you risk side-lining your business as the world moves into the future.
To diversify your workplace effectively, adopt an equal opportunity employer stance. Create an environment that enables and encourages people from diverse backgrounds to thrive. Your business culture should celebrate diversity and give people an equal opportunity to work. Doing so will also help your business attract the best of talents.
The purpose of future-proofing your business is to contribute to your efforts in remaining relevant and operational as the world continues to advance. You’ll find it beneficial to change and adapt to the current business scenario. Remember that even business giants can’t guarantee their survival unless they embrace change.
Leave a Comment or Answer a Question Below: What other ways can you think of for a company to future-proof their business? In your line of work, what is the best way you’ve seen your company manage a crisis? How did they evolve during the most recent pandemic? Did their efforts succeed?
Speak Your Mind