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As 2025 kicks off businesses must adjust to an economic landscape shaped by technological advancements, inflation, shifting consumer expectations, and global challenges.
Therefore, preparing a business for the future requires strategic foresight, innovation, and a commitment to meeting emerging demands, something Peter Wright, President of The Planning Group, is very familiar.
“In my view, businesses this year should be focused much more on margins and pricing gains,” he says. “If they haven't already made big pricing gains post COVID, they should be saying where can we increase prices?”
Peter says whether the business is B2B or B2C, operators should be pondering how they can increase that component of profitability.
“Most of the focus for a lot of businesses should be on trying to make those gains at the margin level partly through pricing, but partly through reducing the cost of goods rather than trying to make a bunch of cost cutting exercises in overheads because a lot of businesses have done that,” he says, noting the urge to reduce staffing costs is often very tempting. “They might say, ‘We’ve got this open position, so let’s just not hire someone for it’. But that position could be the thing that’s actually tied to an incredible value proposition the business is trying to achieve.”
Cutting staff can hurt business
Reducing staff can also lead to increased workloads for remaining employees, causing stress and burnout. Often, when employees feel overburdened and undervalued, their productivity declines, and engagement wanes.
Also, customer expectations are set to rise in 2025, with consumers demanding faster service, personalized interactions, and consistent quality and cutting staff can often compromise a company's ability to meet these demands. Longer response times, lower service quality, and limited innovation can erode customer loyalty, driving them to competitors.
As well, cutting back on staffing and spending often leads to a reduction in resources allocated to research and development (R&D) and other innovation-focused initiatives. Without investment in new ideas and technologies, companies risk falling behind competitors who are better equipped to adapt to changing market conditions.
Peter refers to the philosophy of author and business guru Tom Peters, and his book The Circle of Innovation: You Can’t Shrink Your Way to Greatness. “You can’t cut and cut and become a great enterprise,” he says.
Avoid being opportunistic
“I think for all businesses, not just small businesses, should be saying how can we differentiate? How can we set ourselves apart and how can we then not turn around and sell that?” says Peter, adding having everybody in the organization develop a strong a belief in the value of what it is they are selling is key to making that a reality.
He warns businesses not to be too opportunistic when it comes to mapping out their growth plans for 2025 and beyond.
“To me, the big misstep is being opportunistic and not actually clearly articulating where you're going to get your growth from,” says Peter, adding that ‘chasing rabbits’ - coining a phrase from an old Russian proverb – will not be good for business. “It goes, ‘If you chase two rabbits, you will not catch either one’; it teaches us that trying to achieve two things at once will be unfruitful.”
Strategies to ensure your business remains competitive and aligned with the needs of 2025:
1. Embrace Digital Transformation Companies should invest in cutting-edge technologies such as artificial intelligence, machine learning, and automation to optimize operations, improve customer experiences, and streamline workflows. Additionally, businesses must adopt cloud computing to enhance scalability and flexibility, ensuring they can quickly adapt to market changes.
2. Focus on Sustainability Businesses should adopt eco-friendly practices, such as reducing carbon footprints, sourcing sustainable materials, and implementing circular economy models. Transparency in environmental, social, and governance (ESG) efforts will not only improve brand reputation but also ensure compliance with stricter regulations expected in the coming years.
3. Leverage Data-Driven Decision Making Companies must invest in analytics tools to gain actionable insights into customer preferences, market trends, and operational inefficiencies. By using predictive analytics, businesses can anticipate customer needs and stay ahead of competitors. Data privacy and security should also be top priorities to build trust with customers and comply with stringent data protection laws.
4. Prioritize Employee Development Businesses should prioritize reskilling and upskilling their employees to keep pace with technological advancements and market demands. Offering flexible work arrangements, fostering inclusivity, and creating a supportive workplace culture will also help attract and retain top talent in 2025.
5. Enhance Customer-Centricity Businesses should leverage omnichannel strategies to provide seamless and personalized customer experiences across digital and physical touchpoints. Incorporating AI-driven chatbots and virtual assistants can enhance customer support, while loyalty programs can help retain existing customers.
6. Adapt to Global and Local Trends Companies must stay informed about global market trends while tailoring their offerings to meet the unique needs of local consumers. Geopolitical shifts, supply chain disruptions, and economic volatility also require businesses to maintain agility and resilience.
7. Foster Innovation and Agility Encouraging creativity, experimenting with new ideas, and learning from failures are essential for staying relevant. Additionally, adopting agile methodologies can help organizations respond swiftly to changes in the market and customer demands. |
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