Nostalgia can Kill your Business! May you live in Interesting Times

Give me the choice between making a change and comfort and I will take being comfortable every time.

 

Why give yourself Extra Work?

 

Yet the funny thing is that we do, we do make changes. Some of them we initiate ourselves and some are forced on us. Let’s face it if we didn’t have people constantly asking themselves if there was a different way of doing something we might still be living in caves. No wheels, no paper, no instant hot water, no tampons.

 

Earlier this year I notched up my 13th anniversary since arriving in Bali. I traveled here with just a four-day booking. A month or so later I found I had a fitted out kitchen and someone to run it for me. I was the owner of glasses and plates and a TV.  I traveled to Java to buy a houseful of teak furniture. This sure was some change from the high-pressure business consultancy life I had left behind in Australia – and totally unplanned, quite opportunistic. My money in the bank was earning 50% interest, enough to cover my living costs. I remember going to Delta Dewata to buy some groceries and the owners were so overwhelmed with my Rp 250K purchases they gave me a free umbrella and profuse thanks. Everyone in the store knew of my profligate ways.

 

Delta Dewata has changed out of sight since then!

 

Now nobody notices if my order is closer to 2 million and I can now pay with cash or debit/credit card. And not just the fact that they have increased their floor space at least 8 times, Nor that they have implemented a secondary growth strategy of satellite mini-marts all over the district. These build off their purchasing base and meet a tourist customer need for handy snacks and small simple meals closer to their accommodation. Their stock management and point of sales systems are much better; their staff seems to be much more composed and competent. But more than anything else their stock mix has totally changed; there is a big area devoted to imported products. When you look around you might expect that their customers are primarily expats. But the people behind and in front of me in the check out are as likely to be locals.

 

Affluent locals:

 

Ten years ago pet shops were unheard of. This change alone says so much about changing demographics and customer behavior.

 

Not everyone had the vision or capabilities to take advantage of opportunities. 12 years ago there was another store in Ubud at least as big, Massas, that hasn’t grown at all.

 

So just like down south in Grim City and at BayWatch, changes in Ubud in the past decade have been quite profound.

 

And as these changes have occurred we have adapted. We are nearly always connected to the net and what that means in news and entertainment and social networks.  The Balinese desire to have the latest and greatest is in front of your eyes every day, the take-up in smartphones is quite phenomenal and I’m sure you have heard that Indonesia has the second highest facebook membership in the world.

 

Government Services have Changed!

 

I can trot along to my local village office to pay my phone, water and power bills that are directly invoiced off the internet. There are more tax collectors out checking the store owners. Last week I watched a young guy (face it, nearly every one is a young guy to me these days) stick a 2D barcode on my client’s electricity meter and then use a portable barcode reader to identify the meter and then enter the reading.

 

So one of the changes we in business are going to have to do is at least match the steadily increasing professionalism of government and what that does to our bottom line. Tax collectors will intensify their hunt for sales tax, company, and personal income tax. One of my clients had the tax collectors not check the accounts for sales figures but just check for staff service payments and then multiplied that by 2 to declare how much the business was liable for sales tax – the last two years will do thanks. Could your business cash flow management to immediately pay 20 percent of your current annual sales in past tax?

 

Manpower will be making more checks for compliance with minimum salaries and staff insurance, holidays. The previous ability to get by with inadequate business documentation will go, and the immigration hunt for people working without visas will only intensify. As government becomes more professional so too must we.

 

So those are two major changes that may be impacting on you or a business near you if not already – a much different and more affluent customer base, and a much-increased compliancy need.  What else is looming to destroy my comfortable existence?

 

The first big one is the changing tourist mix. Have you noticed the Indonesian/Mandarin dictionaries already available in bookstores and supermarkets here? Previously Japanese, Europeans, and Americans made up a significant proportion of our Bali customer base, either locally or through export.  Now amazing changes are happening in the middle class of Asia. In the next 6-8 years, we can expect to see 250 million Chinese middle class eager to travel. We can expect to see in the next 10-15 years an Asian middle class of around 3.5 billion. The Chinese travelers I know are sophisticated, affluent and direct. They know what they want and are prepared to say what they think.

 

Will you be in a position to know when they talk about your business?

 

If you think you have seen an impact from Western social media reviews on your business then just keep in mind how much more direct the Chinese are in their comments. Will Google be able to translate these for us in real time so we can respond quickly?

 

If your vision is correctly positioned then the change should not affect it – it is your rock. But your capabilities from your resources and processes need to be able to switch rapidly to take advantage of changing opportunities. Is your own business positioned for the nostalgia of today or the opportunities of tomorrow?

 

Must be time for my afternoon nap.

 

Let me know if there is any aspect of developing a successful business you would like me to write about.

 

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