Around the world, hundreds of thousands of small businesses and the nations that play home to them continue to be rocked by growing geopolitical turmoil, rising economic uncertainty, and mounting supply chain disruption. Throw in increasing inflation, an ongoing shortage of skilled labor, and continuing digital disruption, and you’ve got the makings of a perfect storm of unpredictability for small-business owners and operators.
While small-business owners and decision-makers may not be able to control or otherwise influence major events, it doesn’t mean they can’t control the effects they might have on their businesses. Through future-proofing, or the practice of considering how major events might unfold and creating strategic plans that prepare for different outcomes, small-business owners may just be able to put themselves in the better position with a little forward thinking.
Future-proofing comes in many different forms and can be a handy strategic tool for decision-makers eager to keep their organizations ahead of the curve. If you’re interested in trying out a handful of future-proofing techniques to prepare for tomorrow’s unknowns, consider starting with these five approaches.
One of the best ways to future-proof your company from macroeconomic shock is simply finding ways to get more out of what you’re already building, making, or doing.
Strategic Planning and Scenario Modeling
Futurists spend most of our time studying the state of the market and society, looking for emerging patterns and trends that promise to influence both. We then challenge business leaders to think about how these breaking developments might impact their organization and create role-playing exercises based on real-world scenarios to help businesses better plan and prepare for potential events or happenings.
You can do the same by taking time to consider what’s coming next for your field and posing more “What if?” questions to your team about new technologies, new competitors, possible shifts in political and regulatory environments or customer behaviors, and potential twists and turns the field might take.
Likewise, you may also be able to better safeguard against macroeconomic shocks by creating sample scenarios based on potential developments (“What if more regions of the world slide into economic uncertainty, geopolitical upheaval rocks supply chains further, or new COVID-19 variants temporarily sideline our operating plans?”) that challenge you to address problems before they become pressing issues.
Rethinking Your Approach to Manufacturing, Financing, and Operations
There are many cost-conscious measures that you can adopt to plan for price hikes and inflationary rises. For example, if you expect material or ingredient costs to rise, buy and stockpile these components now, purchasing them at a discount in bulk. Alternately, you can slash operating costs on the back end by expanding your network of suppliers and vendors and exploring the option of substitute materials and components. You can also buy items on-demand or in smaller production runs or purchase older, unsold, or remaindered inventory from other providers and repurpose at a discount, then repackage or reengineer it for current purposes.
Likewise, it might pay off to negotiate better credit terms with vendors (e.g. 90-day vs.30-day repayment terms) before a cash crunch happens, including the rights to return any unsold or unused goods and get your money back. In addition, you might also consider switching to real-time inventory management and shipping solutions, or forecasting around multiple scenarios (best, worst, median) when purchasing restocks for your business.
Embracing Innovation and Reinvention
To innovate, you don’t always have to reinvent. Often, finding simple ways to reuse or reengineer existing services and solutions, or repackage and represent current product offerings to appeal to different audiences, can be every bit as powerful at helping you offset market uncertainty and maintain profitability as more radical or game-changing breakthroughs.
Ask yourself, are there ways that other types of industries or clients might be able to use your products and services? Could solutions or technologies that you’ve built to help solve a problem in one business arena be leveraged in a different fashion to help customers meet additional challenges or needs in other operating areas? Is there a way to quickly update a preexisting product or service, or rebrand it, to make it feel timelier and more relevant? Would it be possible to expand your product mix and potential audience reach quickly and cost-effectively by mixing and matching tools, technologies, and ingredients and materials in new or more novel combinations?
Sometimes, finding success is simply about discovering clever and ingenious ways to give your proverbial tires a slight realignment. After all, one of the best ways to future-proof your company from macroeconomic shock is simply finding ingenious ways to get more out of what you’re already building, making, or doing.
Collaborating with Other Businesses
In times of economic upheaval, many fellow business owners will be facing similar challenges and constraints. Learning to work together on forward-looking partnerships, collaborations, and crossovers can help you share costs, spread risks, and -- by working to cross-promote amongst your respective client bases -- maximize marketing or sales impact.
For instance, to help future-proof your business against macroeconomic shock, you might negotiate in-kind trades, where your companies trade goods and services for no financial cost. You can also design co-branded promotions that leverage each partner’s sales channels and solutions, or arrange to help pick up the slack if one party needs help delivering on contracts or take over-ordered parts and products off their hands at a discount. Similarly, many small businesses arrange to co-buy materials or ingredients together (to secure larger bulk-item discounts), purchase and repackage each other’s solutions for promotion to different target markets (to expand their respective audience reach), or subcontract to one another (when they need access to specialized talent or expert proficiency in unfamiliar areas). Making a point to proactively network and forge relationships with other, like-minded SBOs can help provide you with a much-needed support system in the face of mounting challenges.
Automation and Outsourcing
A multitude of flexible online and real-world services and solutions increasingly now allow you to purchase goods and services on demand, in pay-as-you-go format, helping you right-size business costs down to the moment. Myriad mobile apps, online gig economy sites, and digital marketplaces can connect you with freelance providers in minutes.
Likewise, a rising number of “no-code” solutions can also help you create everything from social media promotions to custom smartphone applications with no technical skill or training needed. You can even buy artificial intelligence routines and digital chatbot assistants smart enough to pass for human service reps.
The key in times of macroeconomic shock is to remember: Nine times out of ten, most of the problems that you’re facing, others have faced previously, too. Preexisting or template solutions to the challenges that confront you often exist. Whatever concerns you’re staring down when faced with sudden uncertainty and disruption, start by looking for tools you could be retrofitting, repurposing, or reengineering. That's a far more affordable, agile, and approachable solution than starting from scratch.
While change and uncertainty often threaten to wreak havoc on your business operations in times of global uncertainty, there are many future-proofing techniques that can help you prepare your business for macroeconomic shock. The time to start planning for and utilizing them is in the present, before these concerns start to arise or mount in the face of growing global volatility or geopolitical disruption. Many worldwide events that will occur are outside of your ability to control. But from the standpoint of business adaptability, you can always steer things toward more positive outcomes when you proactively and diligently focus on addressing them.
Photo: American Express