PwC expects the global value of the key sharing economy sectors to reach $335bn (£216bn) by 2025: a huge increase from their 2013 value of $15bn (£10bn). That’s a seismic shift in the way we do business, and it could mean trouble for SMEs that aren’t prepared to take advantage.
In one sense, the sharing economy is nothing new. People have always shared cars and music, and had people staying in spare rooms. What’s changed is the scale, and that these habits have been monetised by disruptive digital startups.
Digital networks like Airbnb, which allows people to rent out rooms, and Uber, which connects drivers directly to people who need a ride via smartphone app, are enabling the sharing economy to expand faster than ever before.
Adapting for change
Buoyed with success, the sharing economy is expanding into new sectors. What’s more, after an independent review of the sharing economy, the Conservative government looks set to encourage its growth in the UK: and established SMEs must be ready.
The first step is managing your cash flow to ensure you’re insulated against disruption. That means fast, effective invoicing, rigorous chasing of debtors and a system to target repeated non-payers. It also means being innovative in the way you manage overheads and stock, conservative in sales projections and active in spotting opportunities.
The next step is spotting disrupters early. If your industry has long-standing modes of consumption you need to be alert. Look out for new startups, and beware of customers turning into competitors through online networks.
If you spot disrupters, why not partner with or purchase them? If your business isn’t ready for growth, there are ways to adapt to the sharing economy.
PwC suggests taking a tried-and-tested approach from one industry in another, for example moving a C2C concept into a B2B or B2C area. Alternatively, look outside of your core business. The sharing economy exists to sell spare capacity, whether it’s unused space, servers, logistics or employee time.
Most importantly, don’t forget the key aspect of the sharing economy: the human aspect. By connecting with your customers, and making it easier for them to connect with you (and each other), you humanise your business and increase customer loyalty.
For advice on managing your cash flow, contact Dukes Bailiffs today.