Forget the crystal ball gazing and prepare for change
26 March 2018
Let’s face it, anyone starting a business is essentially making a prediction about the future: they have a viable product, they will gain market share and their company will grow.
Some get their predictions right and reap the rewards, and some get it spectacularly wrong.
Take Microsoft’s former CEO, Steve Ballmer for example, who predicted in an interview with USA Today in 2007 that the Apple iPhone would be a flop:
There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidised item
History proved Ballmer wrong of course, there are now 1.3bn active Apple devices in the world and Apple reported a record profit of $20bn last quarter.
Making predictions about the future may not always produce the desired result, but doing so may help to identify rising popular trends and capitalise on them.
Brand leaders such as food delivery firm Deliveroo and film and music streaming services such as Netflix and Spotify have all achieved phenomenal growth in recent years having taken advantage of the growing on-demand economy. These companies recognised a change in consumer behaviour as the public have become more willing to pay extra for enhanced convenience.
While those companies may seem dominant, the widespread accessibility of high-speed Internet means small, agile companies are able to carve out their own niche.
One recently emerging example is UK-based tech leader Gousto, which provides recipe boxes with pre-portioned ingredients packaged and delivered for free to customers’ doors any day of the week. The business appeals to time-strapped people looking for an easier way prepare home-cooked meals.
Selected as one of the hottest start-ups in the country last year by Tech City UK’s Future Fifty programme, Gousto has also raised £56.5m of venture capital funding since the company was set up in 2012, testament to their innovation and the fact they’d accurately predicted the demand for their services.
On-demand start-ups can also boost local communities too. By advertising to technology-savvy consumers, they can outsource this work to nearby small businesses as part of an evolving gig-economy.
Andy Davis, managing director of business finance provider White Oak UK, says:
The rise of on-demand has certainly come to the fore in recent years and I’d think that’s the onward direction of travel, giving businesses the ability to rapidly react and change to align themselves to customer demand.
In these instances, thinking about how you’ll finance developments in your business can be key; you need to think about a facility that can support this – that’s a crucial consideration.
More and more businesses are also concentrating on future-proofing their businesses, making digital transformations to ensure they can keep up with changing consumer demands, and this transition to a digital first approach can offer several advantages to businesses.
For instance, creating an online store-front is generally cheaper and less risky than investing in a physical bricks and mortar. It also enables more personalised services, large-scale improvements to customer experience, with the scope to create new revenue streams using modern digital tools.
Embracing digital can also massively widen a business network and allow firms to collaborate with suppliers around the world, and it has led to the creation of a much broader range of innovative finance solutions to business funding.
It’s an increasingly competitive landscape out there for small businesses. Of course, every new-start wants to be the next Apple, and in these instances, ideas really do become currency.
The level of interest we see from new-start businesses in respect of funding is at an unprecedented level, as is the variety of the sectors and ideas. It’s all about finding that niche, that idea that no one else has thought about, to serve the demands of your customer.
For small businesses and big corporations alike, it’s important to remember that no one has a crystal ball to tell them what the future holds and market research can really only tell you about today, but if you know your audience and take a proactive approach to research, then you may just get it right.