What does the ‘new normal’ mean for businesses operating in the digital realm? These tumultuous times have seen an increased focus on disruption, transformation and innovation. Yet here, we consider the ‘business basics’ – those business tenets that never change. They may operate or transact differently yet they’re as relevant today as they’ve always been.
Cash is king
The number one mantra in business has and continues to be, ‘cash is king’. While the concept of cash may be irrelevant for most digital businesses, having liquid resources ensures that expenditure can be met on time and saves having to sell off assets unwillingly. Depending on your business model, it also highlights the need to be vigilant about payment processing, in particular the cost and ease of access to different currencies, the time lag between the transaction occurring and the funds being deposited into the bank account and the customer experience to name a few.
With the rise of digital currencies and the continued exploration of uses for blockchain technology, there are increased opportunities for businesses to utilise suitable and bespoke payment methods.
The customer is always right
A phrase reputedly coined by Harry Gordon Selfridge, founder of the great British department store Selfridges, to stress the importance of customer satisfaction.
In the digital realm, it’s not a case of actually listening to the customer’s voice but rather charting the customer’s actions using data to provide such information as the lifetime value, acquisition cost, retention, conversion from website traffic to sales, the level of refunds, the number of returning clients, etc.
There will be other measures relevant for your business and continually exploring what they are will provide you with the correct information on which to base your decision making.
Know your product
Not only the title of a song by that great Brisbane band The Saints, it’s also a reminder that customers won’t buy your product or service unless they feel they want it or need it. Viewing products and services through the lens of customers wants and needs allows for alignment between the business strategy, operations, marketing and innovation efforts.
‘The supply chain stuff is really tricky’
No truer words were ever spoken than those by Elon Musk.
An effective supply chain helps to ensure good customer experience. Put bluntly, the customer doesn’t care how detailed or complex your supply chain is, they just want to receive their product or service as quickly as possible without having to think further about it.
To achieve this level of efficiency, a continual review is required with consideration of how new technologies will help deliver your product and services to your clients.
To employ or contract, that is the question
While a company’s employees have always been regarded as its greatest asset, the rise of the gig economy has expanded the way the businesses can access skills both locally and abroad. The gig economy is characterised by platforms such as Fiverr and Enhance which are freelance marketplaces, allowing businesses to obtain certain skills on a project-by-project basis.
One way to determine whether to employ or contract is to identify the level and frequency of work required and whether it is integral to or ancillary to the core products and/or services produced by the business.
A startup may be better off employing contractors to save costs, yet when there is sufficient scale, employees may provide the business with continuity and loyal services. Being open to obtaining skills from different sources and based on the demands of the business will ensure the efficient use of resources.
Another way of obtaining different skills (and helping the community) is employing university students through work-integrated learning programs whereby the students help the business and obtain valuable practical experience in return.
A happy and healthy environment
Creating a happy and healthy environment for employees continues to be important in improving productivity. The digital environment needs the equivalent of an occupational health and safety audit. In other words, is there a frequent review of the environment to rid it of rubbish and impediments to employee safety and efficiency.
For instance, are there processes in place to make sure the business’s digital environment is easy for employees to navigate? Are the IT capabilities being improved to meet business demands? IT security and backups are occurring, does the organisation have an IT hardware replacement plan in place? It’s also necessary to ensure the data being collected is in the correct format to drive business decision making? The adage garbage in/garbage out comes to mind and data integrity and relevance i certainly helps to create a happy and healthy environment for employees.
The final basic, summed up by Benjamin Franklin
There are two things certain in life – death and taxes.
While tax is one of the biggest expenses for any business, for those in the digital economy there may be added complexity due to the service or products they provide, whether they are sold to businesses or end-users and which jurisdictions their customers reside in.
While businesses are generally in control of their tax duties and obligations in Australia, the international tax consequences may be unexpected and significant. Most governments around the world are focusing attention on the use of VAT/GST to increase their share of tax revenue on global transactions.
One way to provide oversight for this potential issue is to have effective tax governance within the organisation. The core of tax governance involves clear roles and responsibilities for tax administration and decision-making, keeping abreast of potential tax risks – the amount of information on the net is significant and ensure that your reporting provides the information the authorities require.
These business basics are only a few of the many that remain relevant in the digital age and are a timely reminder that while change progresses swiftly, the fundamental tenants of business remain the same.