How To Future Proof Your Business For Survival
Many businesses have had to either change the way they work or shut down due to these fast changing environment. This brings us to an important question – Can we future proof our business? Can we increase the chances of business survival? We are not able to anticipate the future for our businesses but we can definitely prepare our business to face unforeseen challenges.
In the swiftly transforming landscape – amid a worldwide uncertainty, both social and economic – that very future has been forced upon us and the shift has gone supersonic. Technology has zoomed ahead in order to connect us to new virtual realities and digitised realms.
Technology, automation in addition to job changes are at the forefront of many people’s minds. Look at manufacturing, for instance. It’s an industry which has changed entirely as robots takeover many of the jobs that we used to do.
At the risk of sounding quite futuristic, we’ll see more and more of this happening in the coming years. While this might scare you (that’s OK), it’s important to look at this in a positive light. Organisations of the future will need to adapt to fast-changing environments.
What’s The Big Deal About Future Proofing?
The definition of future proofing is the process of predicting the future as well as developing methods of minimising the effects of shocks in addition to stresses of future events. Sounds a lot like planning, right? You’ll also note the prominence of the word “process”. This suggests that future proofing is not about one-off gimmicks or quick fixes – it is a course of action, an ongoing function.
Futureproofing is all about the ability to understand (really understand) change as well as how to deal with it. Obviously, in this modern world, change is the most important factor in any business, whether that business is:
- A public or private organisations,
- Large or small.
Every business across the world has to cope with constant change at the moment. And all managers, regardless of their level of responsibility, have to make critical decisions, decisions that have to stand up in the face of accelerating change, and nowhere is that truer than in IT.
The future is a frightening thought for most business owners. Market conditions change rapidly. In addition, technology progresses even faster. So all it takes is one major competitor, one new trend, or one new piece of technology in order to make your business obsolete—or at least cause you a major headache.
Get Your Organisation Into A Strong Financial Position
If future proofing is about reducing the effects of future shocks, then the best way to achieve this is to have a “war chest”. Ensure that your business is profitable and, in addition, has strong free cash flows. This means that if you lose a key customer you are able to withstand it better than if your business was running on a “line ball” basis.
Profit, in and of itself, is not sufficient. Your business needs to be strong in terms of profit, with an acceptable level of return on capital employed (ROCE). This being said, profit is opinion, cash is fact. Just because you’re turning a profit doesn’t mean the organisation has free cash flow.
Your business may be growing so quickly that all of your free cash flow is injected back into the business. This is how companies go broke unless they have an unlimited source of money from outside the business, which is rarely the case.
Contact Future Self Academy
Future proofing your business is a must in these uncertain economic times. To learn more about this, have a look at our course catalogue and learn how to future proof your business from other people who’ve done this. Find out more here.