Your best assets may not be on the books – it’s time for partnerships, outsourcing and collaboration.
Success in the prevalent low-growth environment is all about being agile and responsive. How is this possible? Perhaps business can take inspiration from this popular meme:
- The world’s largest taxi company has no vehicles – Uber
- The world’s most popular media owner creates no content – Facebook
- The most valuable retailer has no inventory – Alibaba
- The world’s largest accommodation provider does not own real estate – AirBNB
As Tom Goodwin of Havas Media says, something interesting is happening.
With all forecasts pointing to a flat economy, it is more crucial than ever to build flexibility into our businesses. We can’t afford to become bogged down with high fixed-costs, inflexible service arrangements and old thinking. Achieving flexibility entails creating partnerships, outsourcing non-core activities and collaborating where possible.
Consider more collaboration
We live in an era of crowdfunding and collaboration. Being prepared to explore new ideas and make connections may open up fresh avenues. Crowdfunding offers opportunities that may have previously not been possible.
‘We can’t afford to become bogged down with old thinking.’
Be wary of fixed costs
Introducing more fixed costs into your business is risky in a flat economy. Low interest rates may be tempting, but think hard about plans to borrow more money or make purchases. You may be able to achieve what you need through service providers. Costs may be variable at an hourly, daily or weekly rate, giving you more flexibility.
Outsource non-core activities
Outsourcing is popular during downturns as business seeks to cut costs and remove items from the balance sheet. But outsourcing is beneficial any time. Partnering with a quality supplier can let you broaden your base when necessary.
Control your outsourcing
Outsourcing is the key to flexibility, but you need a partner who can roll with you in good times and bad. Outsourced arrangements should offer more control, not less, so choose suppliers carefully. Will they cut back services when necessary? Can they grow with you? Most of all, they need to put control in your hands. Beware of being locked in by rigid arrangements.
Consider new pricing models
Pricing across many industries is changing, reflecting demand for more flexibility. What role does pricing play in your business? Is it a barrier to new business? Are there new pricing models that could help you attract retain custom or attract new markets?
Tech opens doors, but can it offer your clients more flexibility? Partnering with a software company to develop easy-to-use systems, for example, can make a big difference to clients by letting them measure performance and improve efficiency. This can make a big impact for a modest investment. Many businesses can benefit by introducing value-added services. Which areas of your business can be improved by technology?
Walter Scremin, General Manager, Ontime Group
This article first appeared in issue 12 of the Inside Small Business quarterly magazine