The future is an uncertain place — sudden disruptions and unforeseen events can mess up even our best-laid plans. As the pandemic taught us, we are never in control of the events that are yet to take place. But even if tomorrow remains a mystery, you can do your part today to improve your business’ resiliency and sustainability. This way, you can guarantee that it can stand tall amid adversities.
How is it possible? Consider these tips in future-proofing your business.
What is future-proofing in business?
Future-proofing is a buzzword that tells you to make all the necessary preparations and saving up today, so you have enough resources to spend in cases of unexpected business slowdowns in the future.
Even the Founding Father of the United States believes in the importance of preparation when he said the famous line: “By failing to prepare, you are preparing to fail.”
Businesses with high reliance on in-person consumer interactions can attest to it. As a survey revealed, SMEs with more than $10,000 monthly expenses have only two weeks’ worth of cash on average. However, lockdowns usually last longer than two weeks. While it does curb the spread of the virus, restrictions prevent businesses from recovering what they’ve lost.
How to future-proof your business
It is true that we cannot truly predict what can happen in the future. Predictive analytics tools may help but their predictions may still differ from what will actually happen.
What you need to do instead is to strengthen the foundations of your organization before calamities strike. Here are some tips for you:
1. Identify and manage risks
You can’t protect your business from threats you don’t know. Think of it as being in a battle without knowing who the enemy is.
Assessing your potential risks — what they are and where they come from — may save your business from falling.
2. Embrace technology
In a business setting, technological tools can go a long way. They give you the ability to manage tasks you may not be able to handle well manually. An example is using cloud accounting solutions. Traditionally, accounting processes consume a significant amount of time. There’s also the risk of data entry errors which can compromise the quality of your reports. With good accounting software, you can automate most of your accounting functions while ensuring your numbers are correct.
Another example is by introducing your products or services online. If your customers can’t go to your shop, why not have your products delivered right in front of their doorsteps? Through this, restrictions may have little impact on your business since you’re not relying too much on foot traffic anymore.
3. Keep track of changes in consumer behaviors
Disruptions affect consumer needs and behaviors. What they consider as a norm before may be different from their go-to activities now.
When running your business, you must always think of your consumers’ changing needs and preferences so you could follow suit. If it means you need to tweak your products, do so. Always strive for continuous improvement so your offerings will continue to be in high demand.
4. Build strong relationships with employees
You don’t run your business alone unless you’re a sole trader. Business milestones are a product of collaborative efforts between you and your employees.
As their employer, surround yourself with reliable staff. Make sure to take care of them so they will also take good care of your business, especially when the times are tough. Give them a comfortable avenue where they can share their thoughts freely. Who knows? The next big innovation in your business may come from them.
5. Keep your finances in check
A positive cash flow is vital for a financially stable business. One of the common recommendations for this is to build an emergency fund equivalent to at least 3 to 6 months of your business expenses. This gives you a safety net, giving you the confidence of maintaining operations amid emergencies.
To make it doable, you can choose to start small. If you’re consistent in saving up, even with small amounts, you can achieve your emergency funds in no time.
6. Enhance your strategic thinking skills
In this article, we discussed the importance of becoming a strategic thinker when managing a business. This skill enables you to look beyond your capabilities and resources to develop solutions to your problems. Instead of relying on old methods, being strategic allows you to innovate and always be ahead of your competitors.
7. Seek growth opportunities
Change is constant, and so must your appetite for growth. Recognizing that the skills and strengths you have today will be obsolete soon will help you become more resilient. The same applies to businesses. To maintain its momentum, you should always be on the lookout for growth opportunities — be it developing your employees, making new products, or pivoting the business.
Future-proofing your business prepares you from facing the uncertain future. Start today by identifying potential threats, embracing technology, understanding consumer behavior, developing strong relationships with employees, maintaining a positive cash flow, enhancing your strategic thinking skills, and seeking growth opportunities.
And if you ever help in managing your finances, the accountants at D&V Philippines are here to help. Contact us today to know our scalable accounting solutions for small businesses. You can also read our whitepaper, Investing for the Future: Adopting Cloud Accounting for Your Small Business, for more information.