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Future Proofing your Business Model – Small and Medium Sized Business in UK

Small and medium-sized businesses are an important component of the UK’s industrial structure. According to the Federation of Small Businesses, their numbers have been growing steadily over the past two decades, reaching a record high of 5.4 million in early 2015. In recent years there has been a shift in the focus of business activity within the UK economy, whereby the country’s default organisational forms in the private sector gravitates towards SME’s.

However, and despite the obvious rise in the percentage of SMEs operating throughout the country, these businesses face major challenges when it comes to staying competitive in the long term. This is why one can never underestimate the importance of having a solid business model that is capable of bringing long-term value to your business.

A bullet-proof business model can help create and maintain value and define how a company will relate to its clients. This article offers some useful considerations regarding the best ways of future-proofing your SME business model.

Make It Innovative

In a recent study, researchers at the IESE Business School and at the University of Pennsylvania found that on the whole, novelty-driven business models yielded better results than efficiency, service, and cost-oriented models, in particular when innovation was specifically applied to business exchanges. Researchers also found that there still is room for improvement in the UK context, as the study referenced above revealed that only 25 per cent of interviewed firms could indeed be defined as innovation-driven.

A good way of ensuring that an SME is and remains innovative is implementing a business model that is innovation-active through the introduction of a new product, service, or process, or by investing in R&D on a regular basis. Practical information on the support schemes available can be found at the Innovate UK website (

Make It Valuable

In successful business models, business processes should be dominated by a value-adding perspective, whereby value creation does not occur in a linear manner, but instead is an ongoing process that feeds off and into all other aspects of your business operations. It is also important to ensure that your business model has strategic value at its core and that your company has a strong focus on social responsibility and on creating social value. Even small businesses can make a difference in this respect, mainly through self-awareness and through a careful consideration of the positive and negative impact that a business can have in the communities in which operates.

Make It Sustainable
Sustainability is one of the most commonly cited themes among successful entrepreneurs when they are required to talk about their business models. This concept is closely related to the considerations mentioned in the previous paragraph, since sustainability implies a holistic perspective that covers practical and theoretical aspects of business operations, such as corporate values and internal business resources. Whereas the value of a company can be eroded over time, having a solid and carefully planned foundation with a focus on sustainability can reduce the chances of your business experiencing value destruction.

Sustainable businesses question their role in a wider social context and not just within corporate environments. Yet, it is important to demystify the concept of sustainable business models, since they are perceived as very costly and complex to implement and are often avoided by SMEs, whose resources and budget may be tight. But in fact, sustainability entails the optimisation of resources and can result in long-term savings and added cost-efficiency.

Make It All About Relationships

Hybrid business models have been gaining popularity over the past few years. These types of organisations are defined by a subject-object business system where relationships play a crucial role. Sustainable business models fall into this category, as they require a relational perspective that takes into account the presence of intricate networks of connections, which include but are not limited to the following:

- The connection between information and individuals.
- The connection between products and services.
- The connection between new technologies and shareholder needs.
- The connection between corporate operational needs and technical resources.
- The connection between industry specific communities – collaboration is the key.
- The connection between potential, capabilities, and value.

The precise ins and outs of hybrid business models are still the subject of much discussion, but one thing is clear: they focus on relationships, by virtue of which businesses become enterprises that have a clear social value. Implementing a sustainable, valuable, innovative and relationship-driven business model can help establish your company as a forward-looking business with great chances of success.





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