Changing Times Need New Strategies

20:49 Wednesday May 7, 2014

by Terrence Bull


When I got my first 'real' job in 1982 I earned $350 per week in the hand, but my costs were only $25 a week for power, telephone, food and rent. Today earning enough to simply survive has become much harder - and some simply are not making ends meet no matter how hard they work. Now there is a solution.

A Brief Lesson in History

Let us start by looking at what has happened over the last 30, or so, years that has got us to where we are today.

In the early and mid 80's making money seemed very easy, and lots of people had plenty of spare cash to splash around on entertainment and a jet-setting lifestyle. However, since then we have seen people's discretionary income (the amount of money they can spend over above their basic living costs) decrease to the point where now families with two working parents are struggling to just pay the bills. So what has changed?

In my opinion the advent of the computer (and other technology - e.g. Fax machines and the new mobilized world) - as well as a couple of global recessions - has had a lot to do with the current state of affairs. However, the computer will also enable us to move beyond where we are currently at into an era of unprecedented prosperity, but we need a radical change in the way we think: let me explain.

The promise of the computer was that it would automate our mundane daily tasks and set us free to spend more time with our families and to pursue altruistic goals (e.g. charitable works or exploring the galaxy - a la Star Trek). However, Bill Gates didn't create a solution that automated our manual tasks, instead he created one that simply replicated them - that is, instead of writing a letter, we had to type a letter. etc. While this created efficiencies in our workflow, it also meant that our clients demanded more from our time. Couple this with the dumbing down of skilled tasks - such as, print lay-up and design, which the desktop publishing revolution has all but destroyed. Suddenly anyone could sell themselves as an 'expert' in previously 'closed' industries - e.g. someone could now say they are a print designer and fool the client into believing that their work is every bit as good as the skilled graphic artist with over 20 years experience. This gave rise to competition from unskilled people in a previously highly skilled and expensive market, which further eroded the hourly rate of the professional and what their employer could charge for their time.

Add to this the need now to have 30 clients instead of just 3 to cover your costs and a lack of basic cashflow planning, which leads to not accounting for overheads and variable costs adequately, and you have a collapse of a whole raft of previously viable businesses - or a global recession. And here we are not just talking about print design companies, but also car companies, furniture manufacturers, electronics companies, and a whole range of professionals - e.g. architects, lawyers, accountants, etc.

With a global recession comes a lack of available cash to spend on such things as marketing, research and development and other 'discretionary' expenditure. This further puts a downward pressure on wages and salary as people start to accept less pay in order to keep their job, or to get employment in a depressed market. Now companies, struggling for work, start competing on price - as they have already fired their skilled salespeople - and so the cycle continues.

Now throw in the internet and global competition - i.e. small countries competing with large countries (for example, New Zealand manufacturers competing with government funded Chinese manufactures) - as well as low paid workers in developing nations (who do not have strict minimum wage and employment standards) being outsourced via the internet to companies in developed nations.

You now have whole economies struggling to maintain a standard of infrastructure that is expected of a developed nation as the tax take is drastically eroded and they are flooded with the new middle class from developing nations (who, by-the-way, are prepared to work for even less wages than the local worker, despite minimum wage laws). This means the cost of essential products and services (i.e. power, telecommunications, and even food) are sky rocketing to keep up with the increased demand for roads, power and telecommunications services, etc. from a growing population when the government's budgets and spending is decreasing - relatively speaking. 'User Pays' has now become the government mantra and so up goes the price - despite, so called, 'increased competition' through mechanisms such as privatisation and State Owned Enterprises (SOEs).

It has reached a point where we simply cannot keep up with the work load required in order to pay our basic costs - regardless of how hard we work (and some people now work almost 24/7 to try and keep up). Our hourly charge rates are just too low and our costs are too high.

So what can be done? Well the good news is, it already has been done! However, we all need a change in our thinking in order to benefit from this change.

Along Comes Automation

The internet, for the first time in history, has enabled customers to interact directly with our business systems and our business systems to talk directly to our customers without needing our manual involvement. This means we truly can expect to see the promise of the computer fulfilled through automated active Client Relationship Management (CRM) systems, automated billing systems, and fully integrated business solutions, etc.

Automation leverages our time and expertise in a way that has never been possible before.

However, having the software alone will not suddenly turn your business into a passive money making machine - it takes understanding and a dramatic shift in the way we run our business in order to take advantage of this solution. We need to firstly understand how a business works (see Database Marketing for a lesson on how a business works and why yours is not). Then we need to work with a consultant who can walk us through the process of changing our business, and our understanding, so that we can align it with good business practice. From here we can now start to understand, and therefore, use these new tools in our business.

The reality is, if we do not begin the process of aligning our businesses to good business practice as-well-as employing these new tools, then we have little hope of still being in business five years from now.

With over 30 years experience in business and marketing consulting and a software solution that has taken over 7 years to develop and has been on the market since 2011, Woogloo has both the expertise and software to help businesses and business people to move their thinking and systems into this brave new world. With Woogloo's unique solution, the future certainly looks good for those who can take advantage of this new dynamic.


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