How To Future Proof Your Business In Turbulent Times

The dynamic nature of the commercial sector brings up a variety of challenges for business owners. From economic downturns and transformative technological advancements to marketing debacles, dozens of roadblocks can hamper the growth of an entity. In addition, a global crisis like the recent COVID-19 pandemic has made it necessary to insulate businesses from the shock waves of such upheavals. If you have purchased a business for sale in South Africa, you should start formulating a plan to safeguard your venture from troubling situations in the future.

It is imperative to build contingency plans to stay afloat during a distressing period for the business. According to experts, almost 40% of small businesses shut down during a financial depression. Thus, here is how you can future proof your business in turbulent times to sail unhampered through the choppy waters.

1. Create An Adaptable Business Model

Complacency leads to stagnation and a lack of innovation. It is crucial to keep changing and adopt the latest developments and management techniques. Being rigid with the company set-up and processes can make the entity suffer during a disruptive time. In certain testing situations, the existing products and services offered by the business might become redundant.

Thus, you need to have a plan B to help you navigate the transformed market situation. The entrepreneur must keep researching the target market and the audience to understand their needs. They must be willing to change the operations and production according to the changing consumer behaviour to stay relevant and ahead of the competition. Whether they need to enhance their supply chain or introduce a new product line, they should not hesitate to adapt.

2. Create a Strong Online Presence

The pandemic has forced everyone to stay at home and spend more time on their screens. The number of mobile internet users in South Africa has soared to more than 36 million in 2021, and 99% of them use their phones to access social media platforms. Therefore, businesses that are not active online are missing out on various opportunities. The future is digital, and it is the best time to take the online route.

Creating a dynamic website and social media pages is the need of the hour. It is the ideal way to attract customers at a minimal cost. Search engine optimisation and paid ads can go a long way in creating stunning online visibility. You can even think about starting e-commerce through the website as customers these days prefer shopping online. Also, it enables sellers to reach a larger target market. If the pandemic resurfaces, your virtual store can help you reach your customers without any physical contact.

3. Reduce Your Debts

One thing that comes along with a business challenge is the shortage of funds. So, while you are running your operations without issues, you need to make sure that you are not lending too much capital. A large volume of loans and debts can destroy your business during a recession. You must reduce your debt obligations and opt for a loan with shorter terms and lower interest rates that can be paid back easily and quickly.

Also, if you are planning to take a loan to buy expensive equipment, you can instead lease the machinery and avoid debt. It is recommended to leverage more such cost-cutting measures to improve your cash flow and get rid of debts as soon as possible.

4. Building Skills of Workforce

Your employees are the most significant asset and must be valued for the work they do for the company. However, you need to hone their talent and use their strengths to make them invaluable. Train them in contemporary management skills and technologically advanced processes to make them more efficient and productive. Keep them motivated by regular recognition of their work, incentives and appreciation that makes them put their best foot forward.

These people will grow with the company and become intangible assets. They will stay through thick and thin and help in keeping the business stable with their expertise and knowledge.

5. Identify the Weak Links

A regular SWOT analysis of the organisation will help you determine the problem areas that need to be fixed, such as too many expenses, shortage of stock, delay in project completion due to lack of staff, etc. Ask your team members to brainstorm and create a priority list of the risk factors that can affect the business.

Find solutions to the problems and convert your weaknesses into strengths by working on them or eliminating them. For example, if there is a lack of staff, you can automate some processes that will help in reducing the workload on the employees. Shortage of stock can be maintained by effective stock taking and inventory management. Make sure that the weaknesses do not turn into threats.

6. Practical and Agile Organisation

The management in the company needs to think and work practices and have their emergency plans in place for every unforeseen and foreseeable calamity, such as natural disasters, economic depression, pandemic, etc. However, these plans should not be just on paper but should be readily available to make a switch when needed.

The business should get rid of processes that make the approvals hang in the pipeline. The organisation should be agile and proactive in making decisions and implementing them without any downtime. For example, in case of negative publicity, the marketing and public relations team should be ready with a backup plan and help avert a disaster.

7. Build Cash Reserves

Many business owners do not create cash reserves because they do not anticipate a downturn. However, building a reserve from surplus capital is vital for keeping the business afloat during a financial crisis. Entrepreneurs must put a part of the profits in the cash reserve to continue with the operations and payment of bills and salaries when the sales are down.

There is no threshold limit for this fund. You must keep adding to it until you are making profits so that you have ample capital when you need it. Do not make payments from this fund and keep it safe for rainy days.

Conclusion

An entrepreneur must be ready for any disastrous situation and get the organisation prepared to face the challenge with minimum stress and impact. Thus, if you have bought a business for sale in South Africa, you must keep the tips mentioned above in mind to prepare for any eventuality.