The secret isn’t really a secret at all – it boils down to Business 101. What makes the difference between businesses that just survive and those that thrive is really an application of strategic business principles. The two core principles that bear the fruit of success – even in difficult economies – boils down to two over-arching goals:
- Don’t react to changes in the market place, get ahead of them.
- Reduce operating costs to increase your margin.
At Pacific Business Centers, we have the unique opportunity to “live” under the same roof with businesses in all sectors of the professional sphere; and work with companies from the start-up stage to large established firms. What we have learned is that there are some common characteristics across all of these sectors and phases of business development that we can learn from.
This is probably the reason that our clients contacted us in the first place regarding shared office space and virtual office solutions – and remains a core part of our business, so it is no surprise to us that it is a common characteristic. However, I would be lapse not to mention this characteristic first and foremost because it truly is core to success. Fact of the matter is that every market has a maximum price that it will pay for a product – this is universal, from gum to financial planning. As competition increases, this maximum price will fall.
So how have we seen our clients combat this fact of business when their product or service has a hard cost associated with delivery? The one cost that can always be examined is operational cost and overhead, and this is where cuts can be made. This is the opposite reaction of what we will call “less-successful companies” who make the error of cutting marketing budgets – which are really an investment in future sales.
Do not doubt that the successful formula of today, will not be the successful formula for tomorrow – To survive, businesses need to be able to change as the marketplace changes. The real challenge is anticipating where your market will be before it gets there – and that is how market leaders are born. With some imagination and knowledge of the business, most companies can see some possible places their industry will be in the next 2 to 10 years. The real challenge comes in setting up your business model with the flexibility to get ahead of these changes.
Are your operations ready to constantly change to gain a market leadership position in the future? Can your infrastructure shift to engage emerging markets? While vision and business mindset plays an important role – your office space, your technology, your workforce needs to be able to move as well.
Outsourcing has become a dirty word, associated with the exportation of jobs, but this is not a complete portrayal. Born from necessity, the great lesson learned from the last few years is that businesses need to run lean. But doesn’t that come at an operational cost to the company – doing without those line items that once seemed to be a ‘necessity’ for doing business?
The honest truth is that smart businesses aren’t cutting those line items, they are outsourcing them to other companies that specialize in providing the service. Specialized business services companies can provide the efficiency and economies of scale to reduce their burden your profit & loss statement. From companies like ours that provide pay-per-use real estate and business services, IT services, Virtual Assistant services and staffing agencies, to Software-as-a-Service – there are a multitude of options just down the street that can outsource your expenses at the same time providing you with a stronger operational infrastructure.
I challenge everyone to take a look at their business model and their profit and loss statement and ask themselves these three questions?
- What is my major operational cost, and how can I reduce this cost to increase my margin?
- How can I make my operations flexible so that I can meet and shifts or changes in the market?
- What operational line items can I outsource at a reduced cost?
Currently serves as a Marketing Manager with a focus in online marketing and market strategy. Prior to joining Pacific Business Centers (rebranded to Pacific Workplaces), Nick consulted with small businesses to assist in a business development and public relations role.