Imagine the year is 2040. You’re a highly-skilled craftsman setting up a company to satisfy the resurgent demand for artisanal products. Or the owner of one of the busy co-working spaces that populate every street corner. You lived through the turbulent, disruptive years between 2019 and 2022 - ‘the reset years’ - and your company has gone from strength to strength ever since. How did you manage to survive the crucial 5-year survival threshold? And the 10-year one?
Now let’s return to the present day. We can’t predict the future (if we discover how, you’ll be the first to know), but we’ve spent some time trying to understand what makes a business durable over time. There are factors common to many long-lived companies: a vision that stays true to itself and relevant; an ability to adapt quickly to ever-evolving markets; a firm grip on managing the day-to-day.
We invite you now to take a step back before plotting your path forward. What can you do to make your business ‘future-ready’?
1. What do we mean by ‘future-ready’?
1.1. Some stats
In spring 2020 (the early months of Covid restrictions), 35% of companies were running at less than half of full capacity.
Things change fast, now more than ever. The capacity to adapt is no longer just a necessity. It’s a state of mind that we must adopt to achieve longevity.
The good news is this: whatever stage your business is at, there are ways of laying and maintaining solid foundations to keep it standing through the years.
1.2. What makes a business future-ready?
There are three criteria that make a company prepared for the future, according to Deloitte.
- Big Vision. A business must satisfy a permanent need and its vision must be kept relevant if the company is to follow. And the vision must be ambitious; business owners need to think bigger than they have in the past. What seems impossible now is not necessarily impossible forever.
- Baby steps. Getting teams on board with change is paramount. If businesses immerse their employees in innovative, cross-functional projects, that change becomes real to the participants, who will be the ones responsible for driving that change going forward. There will be mistakes, there will be friction. But that will teach teams to learn and to adapt.
- Sensible scaling. Growth needs to be sustainable. Companies can scale in a manageable manner if they learn what works, set standards accordingly and stick to those standards. Identifying the champions of agile working within a team and making those champions the agents of agility company-wide will foster an ethos that can last durably.
Of the above 3 criteria, vision is perhaps the most abstract. The vision is a part of a company’s identity and there are certain questions that can help create this identity: if your business was a person, how would you define his or her character in five words? What words would he or she never say? What social or economic problems would that person want to solve? Whose needs would that person satisfy?
2. Start as you mean to go on
Solid foundations make for solid buildings. The tighter your plan at the outset, the easier it will be to chart a course that promotes longevity.
2.1. Know your market
Market research should define where your business will fit into your industry and your sector. It will guide your important choices:
Choosing where to be. Among the factors to consider are:
a) Visibility. If you’re opening a shop or retail business, you’ll want to be in a town center or retail park to maximize footfall. You’ll find local statistics and indexes of potential business locations on the INSEE website and on Smappen.
b) Cost. Some town councils and municipalities offer tax benefits to businesses, so find out what the options are in the catchment area where your business operates. If you provide a service, you can reduce your costs by registering your business to your home address or to a co-working space.
- Know your enemy. OK, perhaps not “enemy”, but the more you know about the competition, the more chance you’ll have of competing with them. Again, INSEE provides a list of all companies in any given sector and in any given geographical area. Trustpilot will be able to tell you what the public thinks of those companies.
- Stay close to your customer. They will ultimately decide the fate of your business, so find out who your customers are. What do they need? How can you provide it? How do you respond to their feedback on your product or service? How can you get them engaged in the growth of your company? This April, for example, Qonto has invited its customers to become shareholders in the company, to be part of a wider community and to share in future successes.
With the market researched, now comes the creation of the company itself. You can read more about that important stage here.
2.2. Set out your purpose
What is your purpose? It’s a question you should be able to answer quickly and succinctly. Do you exist to reduce waste? To improve the work-life balance of your team? To promote sustainable, local-sourced produce? The more precise your answer, the more visible your impact.
Since 2018, your purpose can figure in your company’s legal statutes in France, thanks to a report submitted to the French government that inspired the Loi Pacte designed to boost business growth. For BPI France Le Lab, a solid and consistent purpose is a pillar of business durability.
2.3. Make the right administrative choices
The legal structure you choose for your company can influence its chances of surviving. You might start out as a single-person enterprise (micro-entrepreneur or EURL) and then evolve into another legal form once your sales and revenues increase. If that’s the case for you, you may find our advice on dissolving a EURL useful (link in French).
3. Stay grounded, alert and agile
3.1. Adapting when change happens fast
The economy is shifting and companies with silo-based structures are paying the price. For the self-employed, a study conducted by Malt (link in French) reveals that 72% of freelancers lost at least one contract in 2020. How do we keep up with the frenetic pace of change?
- Don’t stagnate. Continued learning will help stack the odds in your favor. If you can’t afford professional training, seek help - the FIF PL is a good place to start. If you find a variety of training options, prioritize those that offer reimbursable courses, such as Les Echos Formation.
- Exploit digital tools. At Qonto, we use Notion as a single-source database to manage our projects as a team. Other solutions can, for example, speed up your interactions with customers. Soon, we may all be communicating in the so-called ‘Metaverse’, a parallel Augmented Reality world that may well replace much more than just call centers. Keep abreast of tech developments through Accenture, Feedly or Meltwater.
- Embrace social media. You’ll have heard this before but that’s because it’s so true. If you need help, you can find it through Adie amongst others, so that social networks can become a real ally in achieving growth.
3.2. Reinforce your management of finance and risk
Managing financial risk means putting in place procedures, methods and tools to limit and avoid anything that might damage the health of your business. It starts with identifying those risks:
- Strategic risk, such as the arrival of a new competitor on the market.
- The risk of non-compliance, for instance with new regulations on matters such as data privacy (GDPR).
- Financial risk, including late customer payments or falling behind on debt repayment.
- Operational risk, such as theft of equipment or data.
- Other categories of risk include environmental, political instability, global economic volatility and health and safety. Do these apply to your sector or business?
There are different ways of managing these potential dangers:
- Accept and transfer risk by taking out insurance against those that are the most difficult to avoid.
- Reduce risk by implementing new health and safety measures, data protection measures etc.
- Eliminate risk by overhauling production methods or expanding your range of products or services.
4. Focus on skills
4.1. Your skill-set is paramount
Identify what makes your skills stand out from the competition. For example, luxury jeweller Gemmyo relies on its highly specialized know-how in gems and adapts its products to the particular demands of today’s market. Other inspiring SMEs include La Belle Vie, a shopping delivery platform that can count on its solid experience in logistics.
4.2. Make the most of those around you
How do you coordinate your efforts to optimize customer service? If this is not an area of strength for your company, use your network to identify the best advisors in fields you don’t fully master. Self-employed workers and freelancers are increasingly joining forces and creating communities to promote mutual assistance, like Tribu Indé for example. There are multiple benefits:
- You can access information that you wouldn’t otherwise be able to leverage.
- You can propose to other freelancers missions that you don’t have time to work on yourself (and, in turn, be recommended for missions by your peers).
- You can combine your expertise with those of others to be able to offer “grouped” services.
- You can nurture your Unique Selling Proposition (USP) and build your business identity thanks to the inspiration you take from others.
- These communities are also helpful in preserving your motivation in the long term.
According to Howard Yu, a writer for the Harvard Business Review, entrepreneurs are factories of ideas, “rebels capable of transforming an industry and even inventing new ones.” If the question ‘where do you see yourself in 10 years?’ seems to you a little abstract, replace it with this question: ‘why will my customers still be with me in 10 years?’. This may help you see things more clearly.
- Choose your physical location according to the demands and needs of your sector of activity.
- Don’t be afraid to ‘think big’ and think ‘long term’ when developing your strategic vision.
- Constantly look to what risks might be on the horizon, whether they’re internal (and that you can avoid) or external (that you can mitigate).
- Take the time to truly understand your market, your competition and your target audience (both real and ideal).
- Stay true to your purpose. Make your promise something you can guarantee and prove.
- Opt for a legal status that fits your sector and then change it if your growth demands it.
- Stay abreast of tech tools and select those that will save you time and energy.
- Have trust in your expertise.
- Join like-minded businesses in a mutually beneficial and complementary community of entrepreneurs.