5 ways to future-proof your business

According to 2022’s State of Small Business Britain Report, many small-to-medium businesses (SMEs) fail to innovate or adapt their business models. Around 47% of small businesses cite a lack of planning for changes in the market as a key reason for their struggles.

Taking action to future-proof your business is critical to adapt to change when it occurs.

But future-proofing isn't just about avoiding risks—it's about positioning your small business to seize new opportunities. Innovations like artificial intelligence, automation, and real-time data analysis are game-changers that can drive growth and efficiency.

With long-term success as the end goal, this article shares five key ways to prepare your business for whatever the future holds.

Focus on meaningful technology investments

It's easy to get caught up with every new tool or technological trend. However, when investing in tech, it’s important to choose tools that are aligned with definitive business goals and help you solve specific and identified problems.

Investing in technology might look like:

• Cloud computing: To enable access to resources and data from anywhere, which can enhance your company’s agility, scalability, and cost-efficiency.

• Artificial intelligence: To boost productivity and decision-making by automating tasks and analysing data in real time.

• Automation: To remove manual steps and increase efficiency, allowing your team to focus on higher-value tasks.

When considering your technology investments, look at core business processes that take up time and impact decision-making across your business. For example, bookkeeping is something every business needs to do and is critical to accessing accurate and timely financial information required to make business decisions.

Bookkeeping automation tools that simplify receipt capture and automatically categorise expenses not only allow your accountant to focus on financial analysis, they provide you faster access to more accurate financial records that improve business-level decision-making. These kinds of small, focused applications of technology can make a huge difference.

Build an integrated tech stack

A common snag in digital transformation is either looking for a single tool that can do everything you need or getting locked into vendors by investing in technology with poor compatibility.

According to a study by McKinsey, organisations that leverage integrated tools and technologies can improve productivity by up to 20-30%. When considering a new technology purchase, you should prioritise investments that can integrate with a wide range of technology. This flexibility will serve you well in the long run.

However, you also need to consider your starting point. As a business, you will already have some technology investments. For example, if you’re already using Sage, Xero, or Quickbooks for accounting software, any bookkeeping automation tool you invest in has to be able to integrate with your existing technology.

By prioritising new technology that won’t lock you in with specific vendors, you can start to identify software or platforms that solve specific problems you face and integrate them with the tools you already have in place. This not only makes it easy to add more tools down the line, it will also boost efficiency and simplify workflows across your business, helping to drive better performance and faster decision-making.

Pro tip: Take advantage of free trials offered by most tech companies to experiment with products and make sure they work with your tech stack. That way you know what you're buying before committing to licences and subscriptions.

Focus on cash flow forecasting & financial resilience

According to Business Insider, 82% of global businesses fail because of cash flow problems. Of course, this can be from unpredictable events like recessions or pandemics, but it can also come down to poor financial planning.

It’s important to regularly assess your company’s financial health through tools like budgeting, forecasting, and cost control. Proper financial forecasting will help ensure robust cash flow management and reserves to handle unexpected downturns and market shifts.

While experienced financial controllers are essential, the right tools will empower your team to make informed decisions and forecast future financial shifts with precision. If you don’t have accurate and up-to-date financial records, forecasts won’t be correct. Lags in bookkeeping will prevent you from taking quick action based on market changes.

Again, making meaningful and targeted technology investments can make all the difference. The importance of cash flow forecasting is why we’ve focused on bookkeeping automation as such an impactful investment to ensure access to accurate, real-time data that can improve the financial resilience of your business.

Stay ahead of tax and regulatory changes

Staying ahead of tax or regulatory changes specific to your business industry and location is crucial. Businesses that fail to adapt to these changes risk non-compliance, leading to hefty fines, penalties, or even closure. Remember Poundworld? The discount retailer collapsed partly due to non-compliance with tax regulations. This oversight contributed to its insolvency, resulting in the closure of over 300 stores and thousands of lost jobs.

There are several ways that your business can remain compliant through these changes, these include:

• Hiring professionals: Their expertise helps your business take advantage of relevant deductions while avoiding costly penalties.

• Regularly reviewing tax and compliance laws: Staying informed will keep you up-to-date and also adjust your strategies to meet new requirements.

• Keeping accurate records and documentation: This will help simplify audits, and support better financial decisions while reducing legal risks.

While these are all important strategies, they can be resource-intensive and time-consuming. When looking at ways to reduce the admin-heavy nature of this business challenge, look for integration tools that include features like tax calculations and compliance tracking.

For example, automated bookkeeping tools that have this functionality will help free up resources and time. These tools also make it easier to manage your tax filings, helping to reduce the risk of audits.

For UK small businesses, this is particularly important in the context of Making Tax Digital (MTD) regulations that include quarterly filings and digital storage or records. Investing in MTD software can be critical to accommodating these changes without disrupting business operations.

Focus on people - your customers and employees

This might seem cliché, but it’s essential. Making both your customers and employees a primary focus not only leads to satisfaction but also drives innovation. Understanding customer preferences helps you adapt to industry changes and gives you a competitive edge, while investing in your team ensures that they are equipped to deliver the best possible experience. Ultimately, a focus on both customer and employee experience positions your business for long-term success and resilience when future-proofing your business.

From this perspective, you should always be looking for ways to free up capacity so both you and your team can focus on customer satisfaction and retention. Similarly, supporting your employees by improving internal workflows will allow them to prioritise customers effectively.

Access to accurate financial data also helps businesses offer tailored services and timely support, ensuring that customers feel valued and understood, while employees feel empowered to deliver exceptional service. When considering technology investments, it’s important to think about how these tools will enable your team to serve customers better and with less friction.

Let data drive strategic decision-making 

While we’ve covered a range of future-proofing strategies for your small business, the key is having access to accurate, real-time data that allows for critical business planning and strategic decision-making. And, without this data, you won't have an accurate picture of how to run your business and ensure long-term success.

Leveraging financial and operational data allows companies to improve forecasting, budgeting, and planning. With industries increasingly turning to data analytics for a competitive edge, those who do not adopt this approach risk falling behind. Ensuring access to up-to-date financial records, critical customer insights, and important compliance laws empowers businesses to make informed, data-driven decisions. This is why tools like automating bookkeeping processes and integrative solutions are critical in delivering and analysing this data.

At Dext, our smart automation tools help streamline your bookkeeping, giving you real-time access to accurate financial data and more. It’s time to stay on top of your finances, make data-driven decisions, and ensure your business remains agile in an ever-changing market.

Discover how we can help you plan ahead and keep your business competitive—start a free trial or get in touch today!