By Matt Levington, co-founder of Business Doctors and author of the acclaimed book Breaking Big
The world is forever changing; emerging technology, political revolution, challenging economical times to unpredictable global events we are in constant motion — and our business needs to evolve too, so that it can continue to grow and succeed. It has become more difficult to predict the risks of the modern marketplace, but I have identified some key points points that will make your business more resilient, including the impact of domestic and global changes, sellability and trends.
1. Happenings of the wider world
External factors are sector specific to your business, but global events — like the credit crisis of the US that spread to other economies — can affect everyone.
• Think of common trends, such as population increase, climate change, and technology releases — do these impact your sales?
• Some of these trends began a long time ago, and they continue to evolve. Take the e-commerce popularity of websites like Amazon and eBay — while some supermarkets continue to build physical stores. Can you exploit the trends that are happening right now?
• The trends that arise as a result of the happenings of the world can affect the products in demand and the way they are purchased.
2. STEP analysis
STEP is an acronym for Social, Technological, Economic and Political. You may have completed a STEP analysis as part of your business plan before your launch, but you should do it regularly to test your business’ robustness against the current climate.
• Social factors look at the population, age distribution, careers trends, etc.
• Technological trends are the cost of keeping up with the new releases of software for computers, new hardware, or how the rate of technology change affects your business.
• Economic factors take into consideration things like exchange rates and inflation rates.
• Political factors are the level at which the government intervenes in the economy — tax policy, changes to the law, trade restrictions etc.
3. Make your business saleable
Sellability can be used as a future-proofing tactic. Once it is valuable, it will be worth buying. Some entrepreneurs start a business just to sell it on in the future.
• Work out the acceptable return of investment for your business, and run the business to that level and beyond.
• It’s important to make a solid name and brand within your industry — people can’t buy you out, if they haven’t heard of you!
• Your business needs to make a decent profit — and to do this, you need to be aware of all the external factors that could prove risky to your business.
• Get your financials in order — have all your accounts up to date, no one wants messy accounts to have to put right.
• Keep an eye on the competitors and always think about how you can get to the next level of your business — sometimes hiring a business coach will help you reach that level of success.
4. What’s trending?
Consider current trends in retail, online and the service industry to identify how you can improve your own business. Here are just a few to get you thinking:
• Self service has picked up over the last two years.
• Diversification has proved popular, as more bookshops sell coffee, coffee shops have started selling music, and supermarkets are now selling car insurance.
• Smart devices — Apple and Google are the main players in tech-wearables, and are competing for leadership in this sector. Mintel reports that 21% of adults already use either a wearable device or a health-related mobile app.
• Mintel also reports that over a third (35%) of UK consumers have used a click-and-collect services in the previous year (2014) and 64% say that they shop online more now as a result of the click-and-collect service.
• Finally, in Mintel’s consumer trends for 2015 they identify that consumers are already embracing apps that scrutinise a product’s environmental credentials, and it expects this concept to grow in the food and beverages market.
If you consider all the above pointers, you are well on your way to future-proofing your business and making it a success.