Many businesses feel they must reinvent the wheel to innovate and improve cash flow and revenue. But in an increasingly globalized economy, the answers are already out there. American Express had the opportunity to sit down with entrepreneur Peter van Stolk to discuss how SMEs can find the answers to cash flow problems through research and partnerships, and what the future of work looks like following the last two turbulent years.
A retail expert and marketing maven, Peter shared his invaluable insights with Vivian Kaye, CEO of KinkyCurlyYaki, a seven-figure international hair-extension business, and host of the new Amex podcast Business Class: Build It Braver.
As a self-described “serial entrepreneur,” Peter recalls a time when his small business, Jones Soda, was competing against massive corporations in the same market. To stand a chance, Peter realized that he needed to differentiate from his competitors, who had much higher advertising budgets. He said, “I took the approach that I will do nothing that they do. Anything they do, I will do the complete opposite. Because I couldn't play by their rules.”
This ability to be nimble, quick, and make out-of-the-box decisions is one of the biggest advantages of being a small business. When it comes to his best advice for business innovation, van Stolk said, “Innovation is a very big word. Regardless of what the innovation is, you have to have the mindset to adapt.”
Peter believes that this is an exciting time for the future, despite the difficulty businesses have faced in recent years due to the COVID-19 pandemic. He noted, “I see that a really important part of where we're going to go in the future is ensuring that our work community is safe and supported.”
The following is an excerpt of the Q&A with Peter van Stolk
Q: How can businesses get started on using innovation to drive cash flow?
There is no one sort of innovation to improve cash flow. It depends on the business, but I would start by understanding your current cash flow and understanding cash flow forecasting. First and foremost, the pandemic has changed everything. It's made us react quicker. Traditionally, businesses were looking at forecasting cash flow on a 30-day cycle if they're fast, and a 90-day cycle if they're bigger. I think the first thing to really understand is to reduce that period, especially if the environment continues to be volatile. Forecast earlier, and then evaluate what you need to improve cash flow. Improving cash flow means growing sales, and it means turning your inventory. It means reducing your expenses. It means better processes.
Q: What sort of advice do you have for businesses to adapt and encourage innovation?
You have to have the mindset to adapt to innovation. Regardless of what innovation is – if it's innovation in your team, innovation in technology, innovation in your new products, innovation in your marketing –it first and foremost starts with the mindset. Re-forecasting your cash flow is the mindset to get on a discipline to look at your business, give yourself the time to see your business differently, to look at all aspects of your business. Giving yourself the opportunity and giving yourself that time allows you to look at different innovations that you can use to increase cash, increase sales, decrease expenses, and decrease operating costs.
Q: How can a brand-new business think about innovation in sustainability?
First and foremost, there's trendspotting. We live in an environment where we're not alone. If you research, you can learn a lot. The first thing I would do is look at what's going on in the world. We live in a global community, and even though we live in Canada, some amazing sustainability initiatives are happening in Europe, Asia and around the world. First, you want to know what's going on and you need that base knowledge. A new business needs to define itself and do a bit of research on what's out there, because you don't have to reinvent the wheel. We tend to think that we have to do this alone. Companies that grow at 10 times are smart enough to understand that they’re partnering with other players. Partnership is the future. Collaboration and understanding what you’re good at and what someone else is good at is going to be the future. You can’t think in your own bubble.
Q: How will the landscape for future work change because of the pandemic and climate change?
I see this an exciting time for the future of work. I’m excited for my daughter, whose generation has a different opportunity than mine. If we look at workforces today, 42 per cent of women feel burned out “often or always,” compared to 32 per cent in 2020. This fact impacts everybody's business. If your workforce is feeling burned out, how is the productivity? That relates to cash flow. The other interesting thing that I found is that strong company culture can increase revenues by more than four times. If revenue is related to cash flow and productivity, where do we go from here? Another number that I find very interesting is that engaged employees are 59 per cent less likely to seek out new jobs. Then finally, companies with high employee engagement are 20 per cent more profitable.
People say, “You're good at looking at trends,” but the trends are in front of us. I'm not good at looking at trends – I'm just good at looking at information. When I see what the result is for the workforce, I think there's going to be a lot of really cool innovation around that, and I think that's what I'm excited about.
This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. It should not be regarded as comprehensive or a substitute for professional advice.