Great ideas are two a penny, but great businesses are rare. Businesses that achieve scale and long-term success share distinct characteristics: vision, strong leadership, an enthusiastic and effective management team, great products or services and a clear value proposition. They regularly challenge the status quo, finding a better or different way to achieve their goals and overcome their competition.
Welcome to the ‘new normal’, a rapidly changing world where traditional thinking is challenged, old business models are disrupted and new opportunities arise.
What are the drivers of this new normal? There are certain features that are almost certainly here to stay. For one, the old model of high leverage is broken, as access to capital becomes harder and more expensive. As the banks retreat, businesses will have to find new and innovative ways to secure funding for expansion. Business angels, private equity, joint ventures, crowdfunding and peer to peer lending will grow in popularity, with businesses like Funding Circle and MarketInvoice offering alternatives to the established norm.
Another key driver is social engagement and responsibility. People increasingly want to work with businesses that value meaning as well as money – businesses that go the extra mile to create a so-called ‘triple bottom line’, where people and planet are valued alongside the ongoing need for profit. Profit is an essential enabler of growth and prosperity, but how businesses earn that profit and how they impact the community will increasingly come to the fore.
And finally, there is globalisation. Technology and communication have enabled a seismic shift from slow growth, western economies to the world’s new economic powerhouses – not just Brazil, India and China but a host of emerging countries. As Neal Gandhi, serial entrepreneur and author of Born Global, says: “Have you ever experienced an economy where growth is running at 7-8%? People want to buy things from you…”
In this dynamic environment, businesses that fail to recognise these fundamental trends will slowly but surely be overtaken. It will take time but, ultimately, many will simply cease to exist.
So now is the time to consider the future. What are you doing today to ensure your business longevity and success? It’s worth remembering that there’s always a better way, so here’s my motto – ‘If it isn’t broken, break it’!
Footnote: Entrepreneurs who don’t want to reinvent the wheel can benefit from my new book From Vision to Exit- The Entrepreneur’s Guide to Building and Selling a Business, available on Amazon and in good bookshops now.