Important Considerations for Adapting to Evolving Market Demands by Shea Smith
Posted on February 13, 2014
In today’s fast-paced, global environment, change is a concept that business leaders must accept and embrace. Increased competition, evolving customer demands and the rapid rate at which technology advances requires businesses to review their existing strategies and make alterations or restructure in order to thrive and survive.
Change may involve modifications to specific segments of a business, such as narrowing or expanding geographic distribution, products and service offerings; implementing new marketing and sales strategies; upgrading technology; or establishing new processes to comply with the latest regulations. Other times it calls for businesses to make drastic departures from their established business strategies and construct a new model from the ground up. In both cases, businesses must evolve with the times and identify additional revenue streams to remain viable.
Businesses do not change strategies overnight. Rather, their evolution requires a significant investment of time and resources and careful planning to conduct a 360-degree view of current operations, analyze feasible strategies, develop and implement plans, and allow employees, customers, business partners and all stakeholders the appropriate time to adapt. Doing so successfully is a team process, which requires the counsel of trusted business partners, including accountants, lawyers, business consultants and branding specialists. By relying on the experience and expertise of these professionals, businesses may align proposed transformations with appropriate legal and tax strategies that serve to mitigate risks and enhance value opportunities.
Along the path to transformation, businesses should consider the following questions to help design a game plan that they may turn into an operating reality:
• Will diversification require mergers, acquisitions or a partnering to bring about intended change? If yes, how will the transaction be structured? Will the new structure require a review or audit?
• How can businesses be structured to optimize capital, improve tax efficiencies and minimize liabilities?
• How will businesses ensure corporate strategies align with tax strategies?
• Will businesses need to divest themselves of current assets and, if yes, how will they do so and can they write off those assets?
• Will businesses need to invest in new assets, systems and technologies to improve productivity and sustain efficiency?
• Does implementation of new assets bring with it tax credits from which businesses may benefit?
• Will companies need to hire additional staff or outsource specific roles and responsibilities? If yes, how will they be integrated into the existing business structure?
• Are there newer or better technologies available to reduce costs and improve operating and management efficiencies, including product development, manufacturing, inventory management, logistics, payment processing and sales and marketing?
• Will new business models face international, federal, state and industry regulations with which companies will need to comply?
• How will businesses implement new protocols, rights and pricing terms?
• How will businesses structure their internal controls, including segregating duties and managing, recognizing and reporting transactions?
• How businesses monitor implementation of new plans and maintain intended goals?
• How will businesses roll out the new strategy and gain buy in from employees, customers and business partners?
Business model reviews and transformations are vital tools in the management-planning process. Often, market changes occur so quickly that businesses never see them coming. As a result, opportunities may be missed and previous strengths may morph into future weaknesses overnight. To avoid this common trap, businesses must keep an eye to the future, remain diligent in their constant efforts to challenge the status quo and work with their advisors to implement changes in the most efficient ways possible. Their survival depends on it.
The audit, tax and consulting services teams of Berkowitz Pollack Brant have extensive experience helping businesses assess their operations and guiding them through the processes of developing and implementing transformative strategies that achieve goals.
About the author: Shea Smith, CPA, is an associate director of Berkowitz Pollack Brant’s Audit and Attest Services practice. For more information, call (954) 712-7000 or email email@example.com.