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Modernizing your business in 3 key steps
Modernizing your business in 3 key steps
Thinking of modernizing your business? Whether you want to update your practices, retrofit workstations, or totally transform production, the possible benefits are manifold. Read on to discover the key steps to modernizing your company.
For example: A manufacturer could decide to inject significant funds into a factory to enlarge it, redesign production lines or fit them with new automated equipment. Then, not only would said manufacturer boost production capacity, they would also save themselves from the many hassles of hiring skilled labour. Additionally, other innovative technologies could prove efficient and end up paying for themselves quite quickly. Take collaborative robots, for instance, which are designed to work in tandem with humans, unlike their traditional counterparts.
Such production line upgrades would obviously entail changes to employee tasks. Getting rid of repetitive work also comes with the added benefit of reducing the risk of workplace injuries. Yet another advantage to doing business differently!
Another way to modernize is through artificial intelligence. Even though it proves most useful in factory settings, AI can be used to enhance administrative tasks as well. When it comes to billing, for example, you can now dynamically set your prices—think Uber Technologies (UBER-N), whose pricing algorithm adjusts the cost of a taxi ride depending on current demand or peak times. The company—whose market cap is now just shy of 90 billion dollars—has not been afraid to innovate and thusly set the standard for the competition.
Modernizing is all about new tech—Industry 4.0—but that can come with a hefty price tag. Even though the fourth industrial revolution is ushering in bigger production volumes, improved productivity, and higher profit margins, there are still certain challenges to consider before making any major moves.
Step 1 - Surround yourself with experts
Before you go about modernizing facilities or the way you do business, step one entails sending for the right reinforcements. Given how complex modernization and robotization can be, it is natural to feel a bit overwhelmed—so calling on expert support is key. An adept partner can guide you through any preliminary planning and make sure the whole operation is a frank success in the end. Your main objective: selecting a solution that is aligned with your company’s needs.
Avoid going into emergency mode when a systematic method would be much more effective. Do not entrust equipment purchases to an in-house resource with no actual experience: a handpicked expert is more likely to be better equipped to carry out the task for you. The same supplier could become your partner in delivering necessary training to your employees. To make sure your plan works, and that you are satisfied with the new systems in place, never overlook the importance of proper training.
Step 2 - Use a financial solution that grows with your project
The second step is purely financial, since cashflow will be necessary for your project to move forward. Do you currently have enough cash on hand? If not, traditional financing is usually the first option businesses consider.
But for a company that is already in debt, an additional bank loan could beget further burden. In such cases, capitalizing on shareholder equity becomes a consideration-worthy alternative, since doing so can speedily empower companies financially. As opposed to classic modes of financing, money raised through equity does not affect your balance sheet and the funds do not require reimbursement. That said, the entrepreneur will have to divest a percentage of the company’s property to investors—a fair trade off if plans to modernize translate into realizing your business’ full potential.
Step 3 - Partner up with someone who shares your vision
Your partner’s involvement does not have to stop at a mere cash injection into your company’s coffers. In other words, an entrepreneur like yourself must lean on a financial institution with proven expertise, a well-established network, and a long history of financing companies like yours. So before you go about entrusting your investment to any old financial partner, make sure you find one that is capable of navigating the intricacies of your business plan with you.