Evolving your business to fit the needs of a changing sector

It’s no easy thing to come into a well-established business and turn things on their head. But, just because something isn’t easy, it doesn’t mean it shouldn’t be done, as we learn in this piece.

The world of business and technology are changing at a rate of knots. New cloud technologies, services and solutions are coming to market every day, and companies are finding they are calling on ‘traditional’ services less. If your business is one established in the pre-internet era, chances are, it will need to undergo some form of digital transformation to survive. If you don’t begin to adapt your offering, will your clients feel neglected and seek alternative suppliers? This was certainly the situation for Perivan which started out as a financial printing service, and was a key reason for the company striking out into new fields, eventually launching Perivan Technology.

When your market forecasts show a constant, even if small, level of decline, you can ignore the facts and hope for a change in the wind or you can plan to enter another market that is expected to grow. At this point you have a decision to make; do you want to find and follow a natural path of evolution? Or do you want to plunge headfirst into an entirely new sector?

In our case, we chose a path between the two: after all, it’s easier to work with your existing customers than find a whole new client base. While cloud software was entirely new offering from us, we found there was a natural synergy between our printing services and cloud document management. We chose to focus on compliance because this was already core to our business; our clients’ documentation has always been heavily regulated. One of our existing USPs was understanding that regulation, and developing appropriate services.

Another reason to pursue change was to build a stronger business model. A model with stable and predictable revenues strengthens the business and can open doors and new business opportunities.

Four challenges to prepare for

When you are stepping into the relative unknown, some, if not all of what you do will feel like an experiment. Be ready to try many different products and services before hitting on the one that offers a real prospect of developing significant revenues. We discovered cloud software doing exactly that; we settled on solutions that our clients appreciated and which offered us the best long-term prospects. The cloud business model promised us stable, predictable and growing revenues.

Naturally, there are common challenges most businesses in a period of change will face.

1. The primary trial for any business leader during change is to learn quickly, adapt quickly and have the courage to keep going. Our advice would be:

  • Don’t be afraid to try new ideas and don’t be afraid to put them aside if they aren’t working. There is no reason good enough to carry on with a bad idea, especially if the reason is based on ego or pride.
  • Keep the business model in mind. You want to build a strong business with reliable revenues which you can defend against competitors. You also want it to generate cash, unless you have a rich investor, and you don’t want to have to plough all your profits back into the company just to stay competitive.
  • If you aren’t heading a company that has existing expertise in software, you and your team will need to learn enough to make good judgements, based on genuine knowledge and not gut instinct. This will likely include a significant investment in staff training – unless you plan to start again with an entirely new staff! Use and retrain existing staff where you can. People like a challenge and they can usually do more than you think. Your present staff is one you know and can trust. They will certainly resent it if you hire too many new whizz kids and they will appreciate your support and feel more inclined to be supportive themselves if they feel they are valued.

2. Related to this is the fact that you will inevitably have to take on new staff to manage some of the more technical sides of your new business venture. This might lead to some cultural differences which will need to be well managed. Be prepared and work with your HR team to find common ground between the divergent groups.

3. Inevitably, there will be people that don’t believe you are doing the right thing – staff, investors, friends. It is vital to maintain the confidence stakeholders have in the business and the decisions being made. For every decision, ensure you have proof points to back up your arguments and cast aside doubt.

It is important here that you don’t try and take everyone with you – you can’t. Within your staff specifically, you need a small and determined group of believers and as a leader your job is to protect them and their work from being undermined. Yes, invest in training (as already discussed) then, if they still feel beleaguered and misunderstood by most of their colleagues, that’s fine!

4. You may have to fund loss-making activities for a while, and you should plan for financial obstacles. Changing direction will cost money, so have in mind an amount you are prepared to commit – your ‘war chest’. Planning is the operative word here – if you know it’s coming and have the funds set aside to weather small storms, you should break through them cleanly.

Don’t invest it all at once – keep most of your funds back and feed it in gradually as you get more confidence in your chosen idea. Your war chest should be affordable. The company must be able to survive comfortably if you lose the lot.

Changing the direction of your business is never going to be easy – and I speak from experience. It doesn’t matter if your company is two years old or eighty. The most important thing is to make sure your business throws up new opportunities, for your customers, your investors and staff. This is much easier in a growing market, than one in decline.

The article was supplied by Perivan Technology.

Further reading on changing direction

Ben Lobel

Delphine Hintz

Ben Lobel was the editor of SmallBusiness.co.uk from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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