Grow Your Small Business Now!
Written by Doug and Polly White
Successfully growing a small business is challenging in any environment. It’s even more difficult in economically troubled times. In conducting research for our book, Let Go to Grow; Why Some Businesses Thrive and Others Fail to Reach Their Potential, we discovered five tips that can help entrepreneurs overcome these challenges.
Focus on Low Cost Solutions
Dollar Tree, Inc. operates a nationwide chain of retail stores where every item on the shelves sells for one dollar. It caters to bargain hunters―people who want to spend as little as possible to get the things they need. In January of 2008, the firm’s stock price dipped below $15. By October of 2011, it had eclipsed $80. That’s more than a five-fold increase in the stock price during the most economically difficult period we’ve experienced in our working lifetimes. Why? Because in economically troubled times, people look for the low cost solution. Price sensitivity is dramatically increased. Conspicuous consumption is gauche. Even people who have money like to brag about the bargains they’ve found. It’s chic to be frugal. To grow your business in a downturn, focus on offering lower cost solutions.
Allow Customers Flexibility
AT&T and T-Mobile are touting cell phone plans with no contracts. Websites such as LeaseTrader.com and SwapALease.com are offering to help people get out of expensive car leases years early. In trying economic times, people are uncertain about their future income and are hesitant to make long-term financial commitments. Allay your potential customer’s fears by not locking them into extended contracts. Consider leasing rather than selling products. Think about whether some sort of buyback provision makes sense. How can you make a potential customer comfortable that if his or her economic situation changes, there is a way out?
Offer Short-Term, Tangible Paybacks
Customers are sometimes willing to spend money now with the hope of making it back in the future. Companies such as Kyocera encourage customers to pay more up front to get products with lower operating costs. They argue that this will lead to a lower total cost of ownership. This approach may work when people have money to invest, but in economically tough times, customers are looking to make ends meet today, this week and this month. For many, spending more now to save in the long run is not an option. Take advantage of this by focusing on those parts of your business that offer economic advantage in the short-term. Deliver tangible paybacks quickly. In this environment, people are less willing to spend more now with the hope of future benefit.
Answer the Critical Question
Every business owner must be able to answer one critical question, “Why should a prospective customer buy our product or service rather than a competitor’s?” If you can’t answer this question clearly and concisely, cut your losses and seek employment elsewhere. When times are tough, getting the answer right is even more important. You have to separate your business from the competition to survive.
Once you understand how what you offer is different, you need to make sure that the segment of the market that values what you are offering is large enough to support your business. You could market a skunk-flavored Popsicle. It would be different. There is nothing remotely similar to this on the shelves of your local supermarket. However, it’s unlikely that enough consumers would value this difference for you to build a successful business. This is a silly example, but it makes the point that just being different doesn’t guarantee success.
Finally, you’ll need a clear plan to reach this segment. Whoever said, “If you build a better mousetrap, the world will beat a path to your door,” was just simply and unequivocally wrong. If no one knows that you have built a better mousetrap, people won’t be knocking on your door. To succeed, you’ll need a plan to inform your target market segment that you have what they want.
Don’t Be Afraid to Ask For Help
If you want to build a house, you could learn how by trial and error. You could try different approaches to see what works. You could read books on carpentry, plumbing, residential wiring and HVAC. But, you wouldn’t. You’d talk to an architect or a contractor. You’d build on the accumulated knowledge regarding residential construction. It would still be your house. You would determine the square footage, the number of bedrooms and bathrooms, the floor coverings and the chandelier that hangs in the foyer. You wouldn’t abdicate these important decisions to others, but you would seek the help of experts. The thing is that successfully growing a business in economically difficult times is way more complex than building a house. If you haven’t navigated these waters before seek the help of those who have. When times are tight, missteps can be fatal.
Growing a small business in a downturn is tough. Many entrepreneurs won’t make it, but some will thrive. Do you and your business have what it will take not only weather the storm, but to flourish? Following these five tips will help you to clear the hurdle.
About the Authors: Doug and Polly White are Principals at Whitestone Partners; a management-consulting firm that helps small businesses build the infrastructure they need to grow profitably. They are also coauthors of the groundbreaking new book, Let Go to GROW; Why Some Businesses Thrive and Others Fail to Reach Their Potential (Palari Publishing, 2011), which was named a Best Business Book of 2011 by the National Federation of Independent Business (NFIB). The book explains how entrepreneurs can avoid the most common pitfalls as their businesses grow and is available at www.WhitestonePartnersInc.com
Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.