Risk & Business Magazine Cain Insurance Risk & Business Magazine Fall 2017 | Page 7

BUSINESS CHALLENGES
The Rising Tides
And New Challenges
Facing Business
A
s we leap into the future,
there is a changing operating
environment and new
challenges facing business.
My father operated a chain of
small retail stores in the ’70s, ’80s, and ’90s
and saw the rising tides, especially with
supplier credit. The good old days allowed
30-day credit terms along with discounts
if paid within 10 days. Shortly, the 30-day
terms became 14-day, then seven-day,
including automated electronic payments to
the supplier. Paying for your products prior
to selling them clearly runs cross grain to
operating efficiently. The product margins
were shrinking and with many businesses,
the biggest expenses were labour and
occupancy costs. In order to be profitable,
the business needed to source and purchase
everything cheaper, especially in a price-
sensitive business. It is not the selling price
but the purchase price that improves the profit
margin. At the peak of the business cycle,
my father employed 100 full- and part-time
staff. He had implemented a profit-sharing
program but couldn’t generate any interest
in a loss-sharing program.
BY: GARY BELDING, BELDING
BUSINESS FINANCING
SOLUTIONS
wage—or a stepping-stone wage—for a
worker to gain work experience prior to
securing new training and advancement to
another career. There is neither a silver bullet nor a single
winning formula to stay above the rising
tides facing business in today’s economic
terrain.
Consumer behaviour has changed. Some
major retail chains have closed or been
forced to scale down dramatically in
recent years, including Sears Canada,
Target Canada, Sony Canada, Zellers,
Smart Set, Future Shop, and Blockbuster
Video. Product choices, pricing strategy,
home entertainment options, aggressive
competition, and consumers buying online
have changed the entire retail landscape.
Were these major chains just slow to react to
the rising tides? To move forward, you need to rise above the
new challenges and ask yourself:
In the words of Warren Buffet, “In the
business world, the rearview mirror is always
clearer that the windshield.”
Jack Welch stated that if you don’t have a
competitive advantage, don’t try to compete.
As a businessperson, know your strengths
and your target audience. Are you trying
to be all things to all people? Who are the
winners in the industry, and what are they
doing to stay at their peak?
• What are the new challenges facing my
business?
• Where is the industry going? What
are the costs associated with the new
direction?
• Is my business maximizing the use
of social media platforms, such as
Facebook, Twitter, and a company blog?
• How will I finance growth: debt
servicing or an equity partner? (Both
have clear and distinct challenges.)
• What are my customer acquisition
costs and the costs to maintain our
customer base? Do I really know the
true costs?
“If you don’t drive your business, you will be
driven out of business.”—B.C. Forbes. +
This leads into a brief discussion on the
minimum wage debate. Despite the political
pressure and the proponents calling for
higher and more frequent increases in the
minimum wage, the sad reality is that this
wage was never designed as a livable income.
What would minimum wage need to be
for someone to live entirely on this income
or remain on it for their working career?
Arguably, the minimum wage is a temporary
Gary Belding has worked in both the private and public sectors for
over forty years and understands the world of financing. Gary has
the experience, knowledge, and ability to navigate through the
financial landscape and now operates his own business, Belding
Business Financing Solutions (www.beldingsolutions.com).
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