As we enter 2021 we are already seeing enormous changes in the way we work as a consequence of the COVID19 crisis. The prevalence of mobile working, video conferencing, digital solutions and automation have received a major boost as we are forced to work differently. This boost in tech-enabled working is not likely to recede in the coming years. The truth is that a new digital economy was already in the making and COVID19 has merely accelerated the inevitable. The World Economic Forum Great Reset (1) initiative is likely to influence government policy globally in the coming years and puts in motion a strategy to rebuild a more sustainable technology-driven economy. No matter what your opinions are on the Great Reset, an industrial revolution driven by technological change is already here.
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In engineering and manufacturing ‘Industry 4.0’ is nothing new. Automation driven by data, IoT’s and AI has been around for some time. However, Industry 4.0 goes much further than just the manufacture of products. What we are likely to experience in the coming years is a step-change in the way digital solutions and AI impact our daily lives. Many companies will find that their business models are no longer competitive as technology companies disrupt the market through innovation, but other companies will grow and thrive.
Leading the change are small technology businesses and visionaries, who understand the technological opportunity and can overcome many of the challenges faced by big business through agility and responsiveness. Disrupting existing business models and circumventing obstacles through innovation is how SMEs can build successful businesses.
Although agility is at the core of what makes a small tech business successful, small companies are short on time and resources and so they cannot possibly have all the knowledge and insight required to compete with larger competitors. As well as known gaps there are many unknowns, and many entrepreneurs learn by failing first. There are, however, a number of stumbling blocks that small technology businesses frequently come across.
Technology entrepreneurs are often experts in their technological area and technology solutions can frequently appeal more to the tech-savvy than the end customer. Developing a business model that addresses the value points from a customer perspective is key. Firstly, it is necessary to understand what the customer value points are and entrepreneurs should embrace a Design Thinking mindset during the entire development lifecycle of their product. Early-stage analysis of customer needs is crucial and engaging with customers on design ideas and prototypes will help to build a product that is not only technologically innovative but also addresses the specific needs of those who will use it.
Protecting your intellectual property is necessary to ensure your business idea or technology solution is not compromised. IP law is a complex area and IP attorneys are expensive so putting protective measures in place is essential, even before registering a patent. Documenting and time stamping your solution development process, putting Non-Disclosure Agreements in place with collaborators and having strong employee contract terms in place to prevent employees from taking ideas elsewhere can all help to provide a level of protection.
Technology entrepreneurs may sometimes lack skills in some of the softer areas of business management such as marketing, people management and building relationships. Entrepreneurs must be self-aware of their own limitations and be able to seek help and advice where their weaknesses lie. Taking an inventory of your personal strengths and weaknesses can be helpful. Getting a second independent opinion from a coach or mentor will also help to identify blind spots. Entrepreneurs cannot be experts in everything, so identifying weaknesses and bringing in the highest impact skills, either through partners or employees, is likely to be the best approach.
Another crucial area for business management is cash flow and all businesses should have a realistic and achievable cash flow forecast plan, preferably for a minimum of a 3-5 year forecast. It’s too easy to be overly optimistic with revenue forecasts, so it's better to err on the side of conservatism. Overestimate your costs, underestimate your revenue and make sure that the assumptions behind your financial model are sound.
Government money and other government support are often available for innovative technology companies. There are however many different grants, loans and programmes and navigating the landscape can be time-consuming. A good place to start is the UK government innovation funding website (2). The likelihood is that you will also be eligible for Innovate 2 Succeed support, which will provide you with a fully government-funded advisor to help you grow your business. Contact Inventya to find out more.
In addition to gaps in skills, entrepreneurs are likely to have gaps in knowledge. Understanding markets, competitors, the economic and technological landscape are all essential to help minimise assumptions and de-risk business propositions. In-depth market research can be time-consuming but it should not be ignored.
Writing a business plan may seem like an academic exercise when getting a product to market is the priority but having a clear and concise business plan will be essential, especially if you are applying for funding or seeking partnerships. A business plan will also help you to see the bigger picture and the process of developing it will potentially uncover weaknesses that need to be addressed. Business plans should be agile living documents, something that evolves as new information emerges. Putting business plans together requires a questioning mindset to expose the flaws and plug the gaps. For this reason, it’s always better to undertake an independent review of your plan before exposing potential funders and partners.
Inventya can provide support in all of the above 7 areas, much of this can also be provided free of charge if your business is eligible for Innovate UK Innovate 2 Succeed support. If you have any questions about this article, get in touch with us using the contact form below!
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