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Big world, small world

I have friend who can recall nearly every business in the main street where we grew up and most were locally owned and run. Unfortunately the majority are now gone, or going, having been out-competed by the multi-nationals, nationals and on-line providers.

Buying groups have helped some with pricing and margins however product differentiation is still a major issue.

However there are signs of a local resurgence which is being driven by social forces. Demand for local food products is one example and we typically see this at both retail and hospitality levels.

In addition to local produce we also have access to a huge and diverse global cottage marketplace in a way that is quick and affordable. In other words not all products and services need come through the traditional supply chain for a local business to have a clear value proposition in their immediate marketplace.

Local fashion designers can have their product made locally or overseas and ready for sale within very short times-frames. A great example, albeit at a global scale, of how this can work is the business model adopted by Amancio Ortega for the fashion retailer Zara which has been stunningly successful.

From a services sector perspective technical and advisory support services are also available and more easily accessible from a global marketplace. This provides local services providers with the ability to satisfy client needs beyond their immediate capacity and capability.

Peer to peer finance, micro finance and the emergence of local power suppliers will also be part of supporting the local alternative in the future. Opportunity for local business abounds, it requires different thinking, different business models, innovation and collaboration based on relationships founded on trust and mutual benefit are vital.

Big is not always better, small can be highly competitive – are you open to the potential?

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Who stole our monopoly?

Technology and the world-wide web have a lot to answer for!

Gone are the days where professional service providers held a virtual monopoly over the information and technical expertise that underpinned their service offering. Further, the regulators move to a risk based “self assessment” environment coupled with increasingly sophisticated intuitive technology has changed the game forever. Whilst XBRL, the global standard for exchanging business information and reporting, started with the big end of town this will be the norm for SME’s within a relatively short period of time.

The demand for compliance and transactional services will continue albeit at lower margins and volume.

Adding insult to injury the competition is moving from being predominately local to global and damn it, many of these players are quicker, better (choke) and cheaper. Another interesting and recent move is that of the Big 4 international accounting firms who have developed comprehensive affordable advisory packages targeted at SME’s, a marketplace they often left to others competitors.

What all this means is that smaller to medium sized accounting practices are under competitive threat from all sides.

Information is free, knowledge is cheap, however wisdom that solves client needs as they arise and better still predicatively, is at the heart of remaining competitive.

The need to change is a given, do you have an end game, a strategy to back it up, a target market and a value proposition that will drive your competitive advantage?

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Managing ego in your business

Manage and mitigate the negative side of ego in your business

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In his book The Long Term Starts Tomorrow, Nigel Lake addresses, amongst many interesting and important issues, the dangers of the supremacy gene. “The moment that a company starts to believe that its current strength and sophistication compared to its competitors is likely to be genuinely enduring, the rot sets in,” states Nigel. In essence the supremacy gene stifles vision, innovation and the drive needed to continually challenge and develop the organisation’s capacity to remain competitive.

The underlying cause of the supremacy gene is ego which is typically driven by the double edged sword of false pride – “you don’t need to look” and irrational fear – “you dare not look”.

I see so many situations where traits like supremacy, complacency and ignorance progressively destroy an organisation, some slowly, some quickly. Read more