START-UPS are by nature flexible, which gives business owners the chance to adjust their start-up businesses to best meet the current economic climate, says Harry Welby-Cooke.
Here are four ways I think entrepreneurs can leverage current marketplace trends to help ensure a strong launch and thriving future for their businesses.
1. Adapt smartly
Instead of reorienting entire business models around new trends, business owners should first evaluate how their business model can benefit from it in a low-cost way. For instance, the Baby Boomer generation is retiring in greater numbers. What can this mean for, say, a travel business? Depending on the type of business, perhaps a company could offer retirement-themed travel packages for new retirees, or adventure-oriented packages for more active Boomers.
Likewise, Gen-Y is emerging as a buying, spending and cultural force all its own. If an entrepreneur has a unique idea for a conventional eatery or restaurant, a strategy for attracting Gen-Yers could include vouchers for after-hours specials delivered directly to people’s phones.
The key is to use the current business model to tap into trends rather than reorient the entire model. When companies do that, their businesses will be able to ride the waves of change to become a more profitable start-up.
2. Understanding "creative credit"
In recent years, increasingly challenging access to credit has become one of biggest obstacles for small businesses, especially start-ups.
The lack of available financing has forced entrepreneurs to become more creative in the ways they acquire start-up money. This has included negotiating better terms with vendors, learning to fast-track cashflow and looking for ways to take advantage of various types of purchase order or vendor financing.
Business owners will have to get used to this atmosphere of creative financing and be assertive about finding mutually beneficial ways to work with both suppliers and customers. Pre-paid contracts and flexible terms have a place in a business’s credit and cash-flow arsenal depending on the company, sector and relationships with suppliers and customers.
3. Explore the international marketplace
As different global regions have begun to recover from the 2008 global financial crisis, new market opportunities have opened up that can offer diverse markets for products and services, particularly through using popular technology to enable trade interactions.
But businesses have to plan and prepare well for engaging with international markets. From taking orders, to managing different currencies to drop-ship deliveries, start-ups need to ensure they have the capability to handle international business.
Some of the factors that need to be assessed are online transaction facilities, and cash and flexibility to handle any technical issues that arise from using e-commerce.
4. Mine social media
Small businesses should have a presence on Facebook and Twitter, and if they are in any business-to-business category, LinkedIn as well. One way to overcome scepticism is to view social media channels as interactive databases. Start-ups can use them to build an identity and persona around their company, products and clients.
The more entrepreneurs can offer and build value, be it in terms of information, insight into process or products, or even why and how they are owning and running their business, the faster (and more organically) their networks will grow. The people in these networks create a database of contacts.
As with any marketing strategy, it's important to test and measure the return on social media investment. Done right, interactive databases can be as valuable and profitable as conventional ones.
* Harry Welby-Cooke is a leading business and executive coach and South Africa’s master licensee for global franchise company ActionCOACH.