Is Modern Business the Goal for Traditional Businesses?
Mar 08, 2020
Do you have a traditional business where you are tethered to your office, shop or workplace? A business that serves the local community but you dream of growing bigger and serving a larger market?
Marketing gurus spruik the benefits of having an online business where you can make money while you're sleeping. Whilst there's a degree of hype in their messages, the underlining model is where the future lies.
A good friend of mine owned a retail shop for many years. She sold it some years ago to focus on manufacturing, importing and direct selling. Over time, as online product sales became the way her target market was buying, she moved her business online.
Imagine waking up in the morning to find sales processed overnight. Her business evolved from waiting for someone to walk into the physical shop to having her business open 24/7 online. Having an online shop doesn't guarantee sales. You've still got to do the marketing to get people to your online shop for them to see what you have for sale in order to buy.
The focus shifts from face-to-face customer service to creating an online shopping experience. Marketing shifts from ads in the local paper to social media posts and ads.
The learning curve is steep. A modern business that whilst based locally can expand nationally and internationally. The core financial concepts are the same, but the timing of cash flow may be different.
I know a number of highly successful online businesses that talk of turning over multiple millions of dollars. But what you may not know or realise is they are spending millions of dollars on Facebook ads. These people have been doing this for years having started with a small marketing budget, then plowing the profits back into more marketing. Then repeating this over and over again with more and more money in marketing costs.
Making multiple millions of dollars may sound great. The big question is do you want to create a mega-sized business? Or do you want to create a business that makes more than enough money for you to live the life you desire? One where you don't have to worry about paying the bills?
There is a couple of major challenges for traditional businesses to morph into modern businesses. Firstly, the need to make time to learn about the new business model. You will need to identify what is required to set it up and run it.
Secondly, there's the issue of having sufficient financial resources to fund the change whilst keeping on top of the cash flow.
Changing a traditional business to a modern business won't happen overnight. It may take months or years to achieve. Planning what you want to achieve, chunking that down into smaller deadlines, and creating action items is the first step. Once the planning is done, it's time to look at the financial aspects of the decision.
Once you know what is required financially, you will be able to determine the speed at which you can make the change. Success is rarely an overnight phenomenon, it takes time. You will need persistence and commitment to reach your goal.
As with everything in business, there will be failures, challenges, and mistakes along the way, each with another lesson to be learned. Knowing this and armed with a good financial plan, moving toward a modern business may be what provides you with the long-term survival of your business.