With fast-evolving technology, new generations of employees, diverse business models, and ever-changing competitors, how can a business not just stay afloat, but thrive, in a time of continuous change?
Whether you're leading an organization with hundreds of employees or running your small, family-owned business, the key to continued success lies in future-proofing your business.
Here are five ways businesses can prepare today to help successfully navigate tomorrow's business environment.
1. Build a Strong Team
Building a strong team of loyal employees who fit your company culture and share your values goes a long way to future-proofing your business. When employees are happy and engaged at work because they fit in and feel their contributions are valued, your business is less likely to become crippled by high turnover.
Recent research shows that the cost to replace an employee is, on average, equal to 33 percent of that employee's annual salary. And if you're continually spending money – and time – to replace unhappy, disengaged employees, it's tough to focus on strengthening your business.
To help position your company for continued future success, it's also important to consider the generational demographics of your team. Strong teams will include older, more experienced employees who are willing and able to mentor younger employees.
Understanding what today's younger employees (also known as millennials and Gen Zs) want and value in the workplace is key to attracting the best and brightest new workers. For example, a recent survey of millennials and Gen Zs found that business leaders should prioritize work/life balance, learning and development, and well-being to attract and retain talent.
2. Keep Current With Changing Laws
Strong business leaders anticipate changes to business taxation, legal restrictions, and licensing requirements. This gives a company more time to consider how to proactively prepare for changes in a way that will minimize any potential negative impact on the business.
Laws and requirements to watch for include:
- Changes to federal, state, or municipal taxes on business
- Changing HR laws, including federal and state labor regulations
- Changing financial reporting requirements
- Ethics and compliance issues in your profession or industry
- Changes to internet and online laws, such as privacy and advertising regulations
3. Financially Prepare for New Opportunities
For a business to keep growing in the future, it's important to adapt and be able to accept new projects at any given time. This could mean borrowing money to expand your business. Maintaining careful financial records to present to lenders can help your credit application go more smoothly and get approved faster.
A business line of credit could position your business to take advantage of growth opportunities requiring quick access to funding. For example, you could use a business line of credit to purchase supplies to fulfill a larger-than-normal order from a new customer. With a business line of credit, you can access funds up to an approved limit at any time and only pay interest on the funds you're using. The required minimum payment is small (the greater of $50 or 2-1/2 percent of the outstanding balance), and you can pay off the total balance at any time without penalty.
4. Harness Technology to Outshine Competition
It's never been easier to start a business, and today's entrepreneurs know it. They're constantly coming up with new ideas that disrupt sectors previously monopolized by "traditional" businesses. Stay ahead of the game by being innovative to help keep – and grow – your market share. Make the most of technology and, even more importantly, keep an eye on how your competitors use the latest technology.
For example, retailers may benefit from the Internet of Things (IoT) technology in some form, including shelf sensors and customer tracking. As mobile devices emerge as the preferred method of communication (over laptops and desktops), it's time to optimize your marketing and online purchasing options for mobile. Consider new software services and platforms to efficiently connect team members across office locations, and to broaden your ability to select new staff without being constricted by their location.Whether reaching out to new markets, building loyalty with your current customer base, or working on improved employee engagement, retention, and productivity, look for new technology to simplify your processes and maximize efficiency to strengthen your organization.
5. Get Serious About Succession Planning
Although your business may currently benefit from strong leaders, if a future leadership plan hasn't been developed for the time when your current leadership team retires, your business could be at risk in the future.
Recent research shows that 87 percent of business leaders don't believe their organizations currently have identified future leaders to fill leadership roles. And almost 50 percent of businesses report not having a "systematic approach" for identifying.
Succession planning could determine whether your business even exists in the future. This may mean making changes such as:
- Considering employees for leadership roles who exhibit atypical leadership characteristics, such as introverts and quiet leaders, yet who are an excellent fit with your company culture.
- Incorporating leadership potential assessments in the recruiting process and earlier on as part of your in-house training programs.
- Encouraging more diversity in your workforce so you can select potential leaders from a greater pool, including remote workers, disabled employees, women, and new immigrants with global skills and experience.
The world of business is changing rapidly, and companies that fail to adapt to the constantly evolving environment run the risk of becoming obsolete. Help future-proof your business by viewing these changes as exciting challenges to overcome and new opportunities to grow.
Need advice for your business? Talk to a First Horizon banker to explore new ideas today.
