Going Cashless: What can happen to Your Business?

By Ameen Ahsan

India is passing through strange times. A sudden demonetization of the commonly handled currencies have created a havic in the market. It has created substantial chaos to the people, the market and the investors, at large.
 
At Ameen Ahsan Strategy Consulting, we believe that we should make the best of any worst situation. Changes come to the business world, either in a predictable slow way (which gives you time to prepare), and sometimes in an unpredicted manner (like when a natural disaster like earthquakes happen). Either the way, an entrepreneur should not waste his time, crying over the change; instead should find ways not just to survive, but to win.
 
Naturally, when there is a “shift”, most businesses will stumble. The familiar nature of doing business becomes unworkable. Many businesses close down at this stage (because they are not ready to change their ways). This is an opportunity, for the determined businesses, to change its ways, survive and make best use of the lower competition.
 
Recessions, are such opportunities. To start fresh, with lower competition. The present economic situation is also similar. Now you have to decide, if you will lament and be out of the business; or evolve and use the present changes to your benefit.
 
What will happen to the businesses, that has no idea how to go ahead?

• They will wish that this “phase will pass” and do nothing
• As they do nothing (like introduce swiping machines), customers will slowly move to shops that have these facilities
• Once customers start using other shops, they disconnect from their old shop (to which they were loyal visitors), and establish new loyalty to the new shop. This relationship might continue even if the old shop starts using the swiping machines, at a later stage. And there lies the biggest threat. The customer gone can be gone for ever.
• The customers who do not have a bank account or ATMs will be forced to have one, as life becomes difficult the other way round. Meaning more and more customers will flow away from the old format shop.
• Even at the Purchase side, the old format shop will face challenges. Suppliers will start providing stocks only for payments through banks (online transfers or cheques), meaning the old format shop will have to pay in “white”, and which means he documents his sales also in “white”. Old format shops will find this shift of “exposed” business, too intimidating
• All this will require him to have a proper accounting system that is tax compliant, for which he will need better qualified staff. Now new generation qualified staff, do not like to work anywhere. They like a good envirnment where they can grow (money is not the only motivation). This means more management challenges for the old format shops.
• All this could mean that, old format shops, will have to transform totally, to new age businesses, if they have to survive.
• Not all businesses will survive, is going to another reality. Many have had only a simple business model- buy unaccounted stock, sell unaccounted stock, use cheapest man power, make money. This formula may not work in the new scenario
• These businesses might slowly begin to close down, and may be within a year or two, will be forced to exit the market. And God knows the best
• As they exit, they leave an opportunity to the businesses, that positively evolve

 
So how should these businesses positively evolve?

1. Change in attitude: Move from a “self employed mindset to a professional Entrepreneur” mindset
2. Change Business Model from “cheapest shop” to the “best shop” mode
3. Be transparent, pay full taxes (have proper accounts)
4. Have a vision, manage your business to achieve it (a good vision helps you make better decisions, saves investment, saves focus and saves effort)
5. Don’t employ staff, but hire, train and develop a “team”. A team who you can use to facilitate your growth
6. Build a system and professional process, not dependent on any specific individual. (So business goes on, even if the most important staff dies, leaves your organization or even becomes your competitor)
7. Don’t be a business for everyone; but select your customer category- pamper them (So business can focus on making profits by selling quality products at higher margins)

 
In other words, business needs the following transformation;

1. Study the market, once again (identify the new target customer segment)
2. Create a new vision for the next 25 years, and have a detailed one for the next 5 years
3. Change your Business model, to attract the new “target customers”, and to be inline with the “new vision plan”
4. Develop startegies and plans (like Branding, Marketing, Sales, HR, Operations, Investor Management, Risk Management, Equity Structuring, Corporate Governance, Technology Implementation etc) to help the business achieve its ideal Business Model
5. Prepare Budgets to know how much money is needed to implement the “Strategies and Plans” and how this money will be raised (own funds, investors funds, bank sources etc)
6. Prepare a detailed Action Plan for the first year, detailing who will do what task, and when.
7. Periodic Evaluation & Review: A plan is of no use, if its not evaluated and tracked. Employing external experts to help businesses in this review is also a good strategy.

To transform your business, call +91-7558-900-800 or email info@ameenahsan.com