How to ensure your business is viable in a digital age

Late last year, I was presented with the mother of all speaking challenges.

I was invited to speak to a group of sheet music retailers about embracing the online world.
Could I be given a tougher assignment?

Music has already been turned on its head and is now struggling to keep it above water. Book retailing has been completely transformed. So the outlook for an industry predicated on the perfect consummation of these worlds was not a pretty one.

But every cloud has a silver lining and I made a concerted effort at finding one and presenting it to an audience equally desperate to hear one.

Embracing a changing world

After providing them with as much useful information and enthusiasm as I could muster, my final act was a lesson in tough love.

I made them break off into groups and told them to forget the past and design their sheet music retail business as if they were starting it from scratch today.

In other words, to design it not around a bygone era of printed music on sheet music stands, but one where digital downloads and assorted tablets proliferated and teachers may as well be on the other side of the planet rather than the other side of the highway.

They then spent the next half hour piecing together a business model that eschewed the past and was all about the brave new digital world.

Re-thinking the business model

The results were enlightening to say the least. To their credit, very few chose to continue offering sheet music the way they had been all their business lives. Those that did were able to identify niches that were either quite sustainable or capable of growing, given the global market they could now reach.

Others ditched sheet music altogether and came up with a range of ways to stay involved in the industry they’d come to love – if at a price.

While I’m not sure how many were inspired to re-invent their business once they returned home, the responses were such that it certainly made them look at their business in a new light.

Of course, sheet music retailers are not alone in having to re-consider their fundamental business model. As illustrated by the record numbers of business closures, layoffs and offshore resourcing trends, few industries are operating the way they did even a decade ago.

Asking the tough questions

Which leads to the question: How deeply have you delved into the business model upon which your business is predicated?

Have you been quick to recognise the trends and alter your business to suit them? Or have you steadfastly clung to your tried and true methods in the hope that an improving economy might spark you back up to life again?

I hate to be the bearer of bad tidings, but there is a strong chance that your business may never be the same again – not due to economic conditions, but because technology is changing the way your business is done.

Even when the economy picks up again, there’s a fair chance that your industry may not be what it once was.

So what’s the answer? How can you re-invent your business to survive these fundamental shifts in behaviour?

Break your business

I certainly don’t have the strategic business qualifications or experience to answer this for your specific business. But what I can tell you is that a great starting point would be to conduct the exercise we did at the sheet music retailers’ session.

And that is to take some time out, forget your business’ past and create it as if it were starting today, with today’s customers and today’s technology, with an eye on where they are both heading.

Tough as it is, the trick is to forget your investments in getting things to where they are today and look objectively at what those mug competitors are doing to your business.

You might find yourself liberated from an unsustainable business model and invigorated to offer your product in an entirely new way.

Or at least understanding that defending it is throwing good money after bad.

In addition to being a leading eBusiness educator to the smaller business sector, Craig Reardon is the founder and director of independent web services firm The E Team which was established to address the special website and web marketing needs of SMEs in Melbourne and beyond. www.theeteam.com.au

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