Business planning isn’t just a throw-away term – it’s one of the most important things you can do to ensure the successful future of your business!
There is a good reason why some businesses perform better than others; some business owners plan ahead and some don’t even bother to see what their competition is up to.
This statement might be come for a shock to some; in 5 years time, 70% of your turnover will be generated from income streams (activities/ products or services) that you currently don’t offer….
Think about it, let it sink in and start planning for the business of your future!
Future proof your business
With technologies changing the way we do business, some services or products are already in decline and will disappear over time. This is nothing scary or something that should keep you up at night. You merely have to accept it and learn to embrace it.
You will have to carefully think about how you can improve your current offering so your business will be future proof – this is where your business planning comes into play.
With new technologies it could be easier for new players to enter a market that would previously be untouched because of the complex nature of an industry. As business brokers ourselves, we might find that more accountants want to add on a service like Business Broking. While they are now unqualified to do so, they will need to upskill from their current qualifications to be able to offer these services. Equally, the Business Brokerages operating now should be finding new ways to keep ahead of any new developments happening in the industry.
New technologies could also completely change the way an industry is doing business in; Even though MYOB was the major player in accounting systems, it was Xero that had a massive impact on bookkeepers and accountants. Uber was a concept that changed the taxi industry. Initially it was met with resistance but change is inevitable… Most companies now operate without having stock and making pure profit from connecting people to people and people to businesses; think AirBnB, TradeMe, Facebook, Trivago.
Retailers faced a big threat when TradeMe was introduced and they really had to re-think how they marketed their products and analyse if their retail concept was still relevant in this day and age.
But on the other hand, players that kept up, changing (and adapting) their concepts did very well despite the new trend of online shopping. Here in Whangarei, a large outlet store opened its doors and local retailers were horrified, and rightfully so. The reality is that, for a community, it is much better having these large outlets opening the doors. They have proven concepts, often offered to local business people through a franchise model and it creates jobs for more people as they have a system that doesn’t (necessarily) rely on the capability of the franchise owner alone.
Embracing change in business
The reality is that business always has been changing. Also our parents, that had thriving stores in the 80’s (or even 70’s) would have to deal with change. The change might have been at a slower pace but also then there were businesses that went under because the business owner failed to think about the future. The ones that did well have added products, changed concepts, created services that people needed and increased the level of competence and expertise of their staff as a point of difference.
The ever changing challenge in leading markets like telecommunications is a good example of how fast the market is changing. Where 20 years ago their income would mainly be generated by phone calls from landline to landline; 10 years ago it was from voice calls and text messaging on mobile phones and now they struggle to keep up with the supply of data (including data usage to make free calls). The latest change we see is that Vodafone is getting into TV by merging its services with Sky Television. This is not only happening in New Zealand but also in the Netherlands where Vodafone is merging with pay TV provider Ziggo.
Further good examples from the past:
- HONDA started out making piston rings for Toyota (before World War II)
- Nokia started to make paper in the late 1800’s. They only started being inolved with phones in the 1960’s
- Colgate only produced their first toothpaste 70 years after they were founded. Originally it made soap and candles
- The founder of John Deere was originally a Blacksmith
Closer to home Fisher & Paykel imported their products until 1938 until the government banned imports due to the currency being in short supply. They had to adapt, and see how that worked out!
Change is happening all around us and we should embrace it. Adaptability and the willingness to learn new skills and planning ahead will be the key to survive in the future. If you think you won’t be the person that can lead your business into the future you could consider selling your business or find a suitable company to join forces. We will have to force ourselves to learn from the past because the only constant in life…. is change.
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