Don't go into 2022 without first doing this!
Ian Dyason . 2 January 2022
Happy New Year!
I am sure like many people, you are happy to see the passing of 2021 and the advent of 2022, with the host of opportunities in front of you. I know, Omicron is looming large, and with that, some aspect of uncertainty. But the experts are saying that Omicron may not be as deadly as Delta, although it may be more contagious. This might put more stress onto the medical sector already stretched by Delta. Yet, it does look like Omicron can be managed by the elusive "endemic" economic protocols that the government is still hesitant to embrace. With that comes the promise of a more open economy, where we live and work alongside the corona virus. Some things may never return to pre-covid activities, but there are with-covid opportunities that afford us a way to grow out of the pandemic. (We will discuss some of these with-covid opportunities in a coming blog). However, before we jump onto 2022's new workplan, you should do the following...
(1) Assess what worked and what did not in 2021
I am sure you experienced a lot of ups and downs in 2021. When the year started, we were looking to vaccinations becoming the enabler for business to kick off again. Unfortunately, as we speak today, we are still dealing with new outbreaks and while vaccinations can save lives, it does not stop the infections; and as a result, businesses cannot open up as per normal. While this is one thing that did not work well, this unfortunately is not in your control, and cannot be considered as not working well for your considerations. However, your response to the vaccination plans - whether it was too optimistic or too pessimistic - is in your control. So you should be brutally honest with yourself and look at your 2021 business plans and see which worked well and which did not. For those that worked well, see if you can maintain or strengthen them. For those that did not do well, look to see if these remain relevant for 2022, dropping them if they are no longer so. If they cannot be dropped, then you need to put in place different plans for 2022 to shore these positions up.
(2) Assess how much of what you earned in 2021 can be earned in 2022
If you are into a multi-year contract that is running despite Covid, then you are fortunate; you can account for that in 2022 as well. Having a sure thing in business will allow you to build on your less-sure aspects of the business. But if you are not so fortunate, you should look into your own business forecasts and determine how much business volume you can count on in 2022. Some businesses are on a growth trajectory and that means they can account for more in 2022 than in 2021. Some are not really on that footing, and they need to assess just how much of 2021's earnings can also be earned in 2022. For example, a char kway teow hawker in Bedok can safely say that he can account for the same, if not a little more, revenue in 2022 as in 2021. This is because the demographic in Bedok does not change much. But he has to be wary of new market entrants. Now, if he tweaks his pricing due to ingredient cost increases, he might be able to see a growth in top-line, even though bottomline might not budge. Of course, if the hawker is planning on opening a new outlet in Jurong East, then he might even see his top-line grow 150% more, with concomitant increase in bottomline.
(3) Assess how your competitors did in 2021
Of course it is not possible to know how they did EXACTLY, but my estimating how they are doing, using some back of the napkin calculations, you can also have a fair idea how much of YOUR business is being taken away by your competitors. Going back to the hawker example, if there is another char kway teow seller 3 blocks away from you, you can take a guess of how he doing based on demographic estimations. If you want to know more, then station someone at the coffee shop for a day or two and see how many plates of kway teow he fries and make an extrapolation from there. Of course, the hawker business is largely locality driven, although the food apps have made some in-roads to spread the allure a little further afield. But it is not possible to cover a very wide geographic area because of the freshness of the food, and the need for it to be consumed within a short time period.
(4) Assess how much your competitors can "steal" your current business
Next, look at your business and see how much of it can be "stolen" by your competitors. Many business owners are normally caught naval-gazing and fail to see the competition coming in and stealing their customers right from under their nose. Hence it is good to do a little "red-teaming" and see just how easy - or not - your competitors can steal your customers. The greater your products' value proposition is, the more difficult it is to pull your customers away. However, if your product is more like a commodity, then your only defensive line is your cost; and if you are the cost leader, you still control the market. But if you are not, your customers might be pulled right from under you, if you are not careful. So, do look at your business model and see just how vulnerable you are to your competitors stealing your customers.
(5) Assess how much you can "steal" your competitors' current business
Now, turn the tables onto your competitors and see just how much YOU can steal their customers. After all, two can play at this game. Your intent here is to see what chinks they have in their armour and to exploit that while THEY are naval-gazing!
(6) Determine what you need to do to protect your current business from your competitors
Now that you have seen how to attack your competitors, and also seen how your competitors can attack you, it is time to build your defences against them. You might look to strengthen your customer relations, product features, price or whatever you deem necessary to hold onto your customers and make them rave about you. The more you cement the relationship between you and your customers, the more difficult it is for your competition to dislodge them from you.
(7) Determine what you would need to do to "steal" your competitors' business
Finally, turning the tables once again on your competition, ask yourself how you can exploit their weaknesses so that you can steal their customers. This might entail a price war, or a features explosion or the like. In fact, as you build up your defences to shore up your customers, you can also use that in an offensive way to pull your competitors' customers to your side.
Business is competition
Even though we do not like to compete and snatch other people's business, the truth the matter is that business is competition. We are always fighting for the same group of customers, and we are always trying to win, if not on the price point, then on the value proposition point. Whatever that point, we are competing for customers' mindshare and if we do not find ways to make ourselves more attractive to our target customers as our competitors do, then we are simply handing over our customers to them. Then why do we even go into business in the first place?
In the following blogs, we will look more deeply into growing the pie so that we don't have to go into direct competition if we don't need to.