How to introduce change management for your business

Adding new products and service lines or starting a new business within your group can significantly enhance your ability to grow rapidly. However, it’s important to pursue a strategy of change that is right for you and your business. Moving into different business areas can increase your sales and revenue but the change might stress your business more than the move is worth. Before you enter uncharted territories, even based on proven benefits, perform an “if so/then what” analysis to determine if the downsides will outweigh your benefits or if any damage to your current business model won’t justify diversification.

Change management is all about taking initiatives to improve processes and introduce new methods, services or products. As your business leader, you need to have the skills to guide your team through change and your employees need to know what to ask for in order to be successful. The end result of good business change management is that

• your staff embrace change more quickly and effectively

• your business is able to respond quickly to market changes

• you embrace strategic initiatives and adopt new technology more quickly and with less productivity impact.

This capability does not happen by chance. It requires a strategic approach to embed change management across the business.

Diversification

Your business can diversify in several ways, including acquiring a new business, adding a new market segment or selling new products or services. A floral shop owner might add photography services, capitalising on the needs of wedding planners who use both services. A website developer might add SEO consulting services for businesses with existing websites that want to improve search results and increase traffic. A business can diversify by providing the same product or service for a different market segment, such as a marketing company that specialises in working with law firms creating a department that specialises in nonprofit marketing. This is known as horizontal market segmentation.

Increased Sales and Revenue

Obvious benefits of diversification include increased sales and revenue. If a business has captured a significant portion of a marketplace, it’s difficult to improve profitability because there is little room for new customer acquisition. Adding a new product or service or entering a new market segment offers the opportunity for exponential growth.

Dependency Reduction

Many small businesses rely on only one or two large clients for most of their revenue, making the company extremely vulnerable to failure if one client leaves. Even if diversification does not increase your profits exponentially, it can provide you with enough of a cushion to withstand losing a key customer while you seek a replacement.

Operational Stress

If customers want your new product or service, the requirements to fulfill those sales might strain your ability to operate, making the diversification unwise. You might reduce productivity among employees who must now multitask. Short-term capital needs and debt expense to fund the diversification might be too high. If you produce, store and ship products, your supply chain might not be able to handle the burden.

When you consider a diversification opportunity, analyse the affects it will have on your human resources, information technology, production, finances and marketing. The risks associated with diversification become more acute when you move away from your comfort zone. Extending your product range to appeal to an existing customer base (i.e. cufflinks and ties to match your shirts) is relatively low risk. Launching an unrelated product to an established customer base carries a higher risk. Selling new products to a whole new marketplace is seen as the riskiest approach of all. But it can pay off.

The key is to plan carefully. Do your market research. Get the right managers in place and ensure any new venture is properly funded. You should also look carefully at the financial and corporate structures. Do you keep everything within the existing business or establish a new entity. With the right people, business plan and structure in place, diversification can serve to supercharge growth. Contact The Business Minder at Mind Ur Bisnis for further assistance and advice +6281999121181.

Changing Your Business

There comes a time in the life of every business owner when you don’t want to keep working as hard as you have been or that you need more time to do other things that are equally important to you. It's not that you are ready to sell your business and move on; it's more a matter of achieving a more pleasing balance between your work and personal life and a more satisfying success. If this describes you, here are some practical strategies for changing your business

Start turning down some clients and/or referring clients to others

If you offer services, take a hard look at the hours you put in in a typical week and your client list. Not all clients are equally joyous to work with, and a fast way to free up more time is to let the more troublesome clients go. Release them courteously by finishing off your commitments to them and referring them to someone else. When it comes to new clients, be firm with yourself. Think about how many hours the new client and your needs represent and how taking on this new client would affect your work/life balance. Turning down work is one of the most difficult things to do, but it can be in your best interest.

Hire employees to cover the business

If your business is retail and you're putting in long hours because you're the one always "manning the counter", hiring employees is well worth the trouble and expense. Think of all the things you could be doing if you weren't "stuck" at the store for all your business' opening hours. This strategy, of course, will also work well for service businesses, if the service is such that other people can be relatively easily trained to provide it.

Consider outsourcing some functions or aspects of your business.

You might also take a look at outsourcing your marketing, or outsourcing the design and maintenance of your web site, if your business has one. There is absolutely no reason for you personally to do all the things that running a successful small business requires.

There are great resources, such as The Business Minder consulting business analyst (in AEAN countries) ready to step up and help you. I am standing ready to provide "offsite" handling of many change management and analysis tasks. Once you get used to the idea and see what a good job I can do for you, you'll never look back.