Lack of sufficient capital, faulty infrastructure or business models, and steep competition are some of the most common reasons businesses fail.
But there’s one threat to businesses that many entrepreneurs overlook: becoming irrelevant due to advancements in technology and trends.
In fact, one study found that around half of small business owners find tech trends, such as cloud computing, AI and data analytics, complicated. But if you don’t anticipate these changes, your business might not survive the evolving landscape.
To give your business the best chance of survival, here are some strategies you can use to prepare it for the future.
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1. Know that a lean team is a winning one
The traditional hierarchy of command and responsibility in a company might not be as effective as it once was. For instance, companies no longer need a big number of employees to run effectively. Numerous studies have revealed that small teams are more effective at tasks than huge teams.
In one study published in the journal Nature, researchers who analysed 65 million papers, patents and tech products from 1954 to 2014 found that smaller teams of scientists consistently found new ideas. On the other hand, larger groups were more likely to only add new information to existing ideas.
Many successful companies have adopted the ‘small team’ model to maximise on this effect while minimising running costs. Google is known to separate employees into tightly-focused teams that specialise on specific projects on a micro level.
Because company sizes are varied, there’s no magical number for an effective team. However, every business owner should strive to keep their company structure lean. If possible, go for a horizontal/flat organisational structure to minimise middle management levels.
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If it works for your type of business, you can also cut overhead costs by having your staff work from home. This eliminates the expenses associated with having an office.
2. Offer an experience, not just a service
Known as CX in the business world, customer experience is what defines your customers’ perception of the brand. This perception begins forming even before the customer buys your product, and is intensified through each stage of the lifecycle including purchase, onboarding, implementation and renewal.
Once a customer comes in, it is up to you to make sure you establish and maintain a fulfilling relationship. Once this bond is established, it will be harder for a customer to ditch you for a competitor, even if they’re offering slightly more-advanced technology or lower prices.
Your physical stores should be welcoming to your customers, with courteous and helpful employees as well as an inviting ambiance.
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Your online stores (where shoppers are spending more time nowadays) should be easy to navigate.
Bear in mind that loyal customers are the best promoters for your business. They buy more from your business, stay with your brand longer, and make trustworthy recommendations to their friends and acquaintances.
But you don’t need to go overboard to win your customers’ loyalty.
According to Toman Dixon in his book The Effortless Experience, the key to great customer experience is consistency in delivering a good experience, resolving queries quickly, while requiring minimum effort from the customer.
If your business meets these expectations every time, you are likely to retain customers and see better profitability.
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3. Predict tomorrow today
Remember that tomorrow’s technology is built on today’s. To successfully prepare for the future, you have to learn everything you can about the existing technology and trends. Armed with this information, you can anticipate end-user’s needs and create solutions that will be in high demand.
Keep an eye out for influencing factors surrounding your business. For example, look at how the introduction of smartphones affected the camera industry. Kodak, which was once a billion-dollar camera and film company failed to plan for this, which led to it filing for bankruptcy in 2012. Smartphones have also killed other products, such as radios, music players, paper maps, GPS devices and recorders.
Don’t be afraid to think differently. When Henry Ford was building cars, he had to deal with naysayers who were used to horses.
“If I had asked people what they wanted, they would have said faster horses,” he famously said.
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Your customers might not even be able to explain what they want, but it is up to you to anticipate their needs. To do this, you have to be a keen observer of trends in your industry. If you’re operating in a developing country like Kenya, you can stay ahead by regularly checking international trends in your industry. You can do this by following relevant blogs or creating a Google Alert on topics of your interest.
4. Diversify or die
You might have heard that focusing on one product is the key to success. In fact, many companies owe their success to one great product.
A good example is Crocs, the company which creates a casual shoe. For many years, the company has maintained its focus on the same basic shoe design, albeit in different colours and stickers.
But this strategy can be unsustainable in the long run, especially for big companies. It’s still advisable for small companies and start-ups to focus on their bestseller. But you must always think of ways to diversify your product portfolio to increase your chances of survival.
You don’t have to create entirely new products – diversification can be as simple as offering different colours or qualities.