You can future-proof your startup by following a specific course of action that hedges your risks. The past couple of years has proven to be difficult for many business owners. Their experiences have helped them better understand the precarious nature of their companies. This made them consider measures to future-proof their businesses.
Future-Proof Your Startup
Future-proofing is a form of strategic planning that navigates the uncertain and ever-changing business climate. It encourages sustainable models and strategic plans to guarantee security, financial stability, and business longevity.
Every company takes different steps in future-proofing its business. If you’re running a start-up, here are key strategies to future-proof your company this 2023.
1. Build a Contingency Plan
While cash reserves are helpful, they’re not enough. If disasters keep occurring (like COVID-19-related challenges), they’ll soon run out. That’s why having business contingency plans is essential. They’re among the basic ways to future-proof a company.
Business contingency plans are backup plans companies can employ if their expected business outcomes fail to materialize. As alternative strategies, they can mitigate any damage and response time, which can help business operations to get back on track as soon as possible.
Since every business is unique, there’s no one-size-fits-all business contingency plan as a way to future-proof your startup. However, there are essential parts that are common in various contingency plans, such as determining and weighing potential risks based on likelihood and severity and running a business impact analysis (BIA).
Specifically, a BIA is an exhaustive investigation to identify the exact systems that can keep a business operation ticking. It helps companies predict the consequences of disrupted business functions and processes and collect information needed to develop recovery strategies.
Determining and evaluating the impacts of any disruptions on a business is important. Overall, it provides the basis for investment in prevention, mitigation, and recovery strategies, which are crucial for future-proofing.
2. Invest in Business Insurance
In addition to BIA, investing in business insurance is another way to prepare and plan for any potential business risk. No matter how proficient a company is in budgeting, cash flow dynamics, or tax and bill management, it’s impossible to anticipate the future and how it will impact your organization. That’s why to future-proof your startup it’s important to insure your company beforehand to protect it from financial loss in any crisis.
Business insurance can be very expensive, depending on your company’s size and insurance needs. Due to their hectic schedules, many companies impulsively sign up for an insurance policy without completely understanding it. It can provide a temporary fix, but it’ll eventually lead to a potential financial disaster, such as being underinsured or paying for costly insurance you don’t really need.
Whether you’re knowledgeable or inept about insurance, the key is research, and it will always be. If you’re unsure of the coverage limit definition or confused about the numbers in a proposal, don’t hesitate to ask questions from the agent. It’s also helpful if you learn them. Additionally, always know your options. Ask for quotes from different insurance companies and compare their perks and rates before purchasing.
3. Embrace Digitalization
The catastrophic blows of COVID-19 helped underscore the pivotal role of digital transformation in businesses. Thanks to digital solutions, several companies grappling with subsequent layoffs and revenue losses managed to stay afloat during the pandemic.
Digitalization is spurred by a slew of different reasons, mainly enhanced customer experience and engagement, maximized operational efficiency, improved profitability, and cost-saving. Because of these advantages, businesses will continue to invest in digital solutions.
In fact, according to International Data Corporation (IDC), digitalization’s global investment will likely reach a staggering $2.3 trillion this year. With this market of around 17.1% compound annual growth rate (CAGR), investing in these digital transformation initiatives won’t only keep companies ahead in the world of business but also future-proof their business against fast-paced technological advancements.
4. Engage in Open Innovation
Many business owners and leaders are more concerned with sales and product development than with the constantly changing preferences of their customers. As a result, they lose clients, acquire a negative reputation, lag behind the competition, and miss out on marketing chances. That’s how important consumer feedback is to your business.
The trend now is to embrace open innovation. It’s a business practice that encourages collaboration and feedback from customers, suppliers, partners, and anyone outside your organization. This approach is utilized since there’s always more information outside your company. In addition, it’s one of the most reliable and cost-effective sources of innovative business ideas.
Gone are the days when companies no longer need silos or R&D secrecy. A future-proof, automated, client-reaching solution is ideal in this digital age. The more external insights you use, the faster you can solve a problem.
5. Use MVP Technique
Developing a minimal viable product, also known as an MVP, is another method for encouraging open innovation and future-proofing your business. In simple terms, it’s a simplified version of a new product that will be marketed with only the most basic features yet enough to get customers’ attention.
The main goal of an MVP is to get enough feedback from the first users before releasing a full-fledged product. This validated learning can help you iterate and improve your new product immediately.
For example, if things go wrong, you can immediately gather meaningful information, design remedies, and deploy them for real-world user trials. It’s a great approach to future-proof product development without losing time, money, or promotion.
The world is transforming at a rate that’s much quicker than any of us could have anticipated. Despite this ever-accelerating pace of change, many companies would still rather maintain the status quo, resulting in their inability to secure the long-term viability of their businesses. In contrast, future-proofed companies know how to adapt, optimize, plan for future events, and, most importantly, prevent business failure.