In the last 10 years, the economic environment and business models of many companies and sectors have changed dramatically. With the advent of the internet and social media, entrepreneurs have had to adapt to a new and different business landscape. No longer can businesses rely solely on traditional marketing methods and financial models to reach their target audience. Many may use digital marketing and social media platforms to reach potential customers. Furthermore, businesses must now be more transparent. Customers today can easily research a company and its products or services before making a purchase.
Therefore, entrepreneurs must now provide accurate and comprehensive updates about their offerings. Furthermore, since social media enables customers to voice their opinions about a company or its products and services, business enterprises must be more customer-centric and service-oriented than ever. Digital transformation is inevitable for businesses today. The question is no longer whether a company should digitize but how fast it can do so to remain competitive. Technology is constantly evolving, and what is currently considered cutting-edge can quickly become outdated. If a business doesn’t keep up with the latest trends, it risks becoming extinct.
Hence, a business owner should understand that what worked yesterday doesn’t necessarily give the same results anymore. Business models have entirely changed because of the impact of technology and world-shaking events like the 2008 recession and the Covid-19 pandemic. Even financial and economic models have changed drastically to a point where intangible assets are seen as more relevant for wealth creation in specific contexts than hard assets like land, plant, or machinery. For example, in February 2018, the Harvard Business Review highlighted the perplexing fact that while Walmart was valued at US$300 billion, against hard assets of US$160 billion, Facebook (now Meta) had only US$9 billion hard assets but was valued at US$500 billion.
HBR highlighted many such instances in their article to illustrate that previous financial models are failing today’s businesses pitiably, and balance sheets and books of accounts have more relevance for regulatory compliance than from the angle of actual investor interest and valuation. While the HBR article headlined ‘Why Financial Statements Don’t Work for Digital Companies’ primarily focused on digital enterprises, the Covid-19 pandemic and the rise of remote work that came two years after that article have further ensured that in a no-touch economy, one cannot escape the digital environment or its implications.
Thus, there are several digital trends that businesses must keep up with to stay relevant. One is the move towards mobile-first experiences. Of late, more and more people are using their smartphones as their primary devices, and companies need to cater to this trend. Another development is the rise of artificial intelligence and voice search. As AI evolves and becomes more innovative, it’s changing how people search for information and products. Finally, businesses must also be prepared to cater to the increasing demand for personalization. Because people want products, services, and experiences tailored and customized to fulfill their individual needs, companies should be able to provide them.
With the ripple effect of the Covid-19 pandemic persisting and digitalization continuing at a supersonic speed, the economic environment has become more challenging for businesses still toeing traditional models. With many companies struggling to survive in this changing environment, business owners must become adaptable and creative if they want to remain relevant. Moreover, they should explore new ways to market their products and services and fulfill the needs of their target audience. They should also be ready to change their business models if necessary. To succeed as an entrepreneur in today’s business environment, you must keep costs low while striving to generate higher revenues. You will also need to focus on your core competencies while providing high-quality products and services. Meanwhile, you will have to improve operational efficiency and nurture a lean organization while building solid relationships with your customers, partners, employees, and other stakeholders. Furthermore, you must cultivate a long-term vision to weather the economic turmoil and forge ahead. As an entrepreneur, you will finally realize and acknowledge that what worked while doing business 10 years back is unlikely to work today.