December 2024 - Peripheral Perspectives - 2025

Happy December, Peripheral Thinkers?!

Are you excited about what 2025 has in store for you and your business? Since you are Peripheral Thinkers?, I suspect you are not simply waiting for whatever comes your way. Instead, you have created plans, alternatives, and innovative approaches to MAKE 2025 your best year.

Not everyone can say that. If you watch the news and read headlines and prognostications, you’ll find sensationalized messages becoming more frequent AND contradictory. Where is the economy going? What sectors are at risk? Is AI really the answer to everything that ails us?

Don’t be wooed into following the crowd because of breaking news and changing trends.

Be informed but not conformed.

Remember why and how Peripheral Thinkers? are trendsetters, not trend followers. We are the disruptors, not the disrupted. We use all the resources available to innovate before and beyond obstacles.

Here’s to an innovative, high-growth year for you and your business!

Thank you for your patience and understanding of this month’s two-day lateness. Also, thank you to all who sent me well wishes about my unexpected knee surgery.

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Peripheral Perspectives – 2025 Top Business Leaders’ Issues

Research of business leaders’ 2025 priorities reveals the following five themes listed in priority:

1.????? Managing Costs and Inflation (Fast Company)

2.????? Workforce Retention and Development (Robert Half)

3.????? Technology Adoption for Efficiency (Our Business Ladder)

4.????? Building Supply Chain Resilience (CEO’s Right Hand)

5.????? Customer Retention and Acquisition (PwC)

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What The Experts Say

Managing Costs and Inflation is the most critical priority because it is foundational for all other priorities. If costs spiral out of control, they affect cash flow, profitability, and the ability to invest in other areas like technology, workforce development, and supply chain resilience.

Inflation increases the price of goods, services, and wages, directly impacting operating margins. Unlike workforce or supply chain challenges, which can vary by industry, cost pressures are universal and affect all businesses, regardless of sector.

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Effective cost management is often the difference in surviving economic turbulence. Without controlling inflationary pressures, scaling operations or maintaining competitiveness becomes nearly impossible.

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Do you follow the reasoning? Sure, it’s logical.

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THE Solution!

The top 10 recommendations for managing costs and inflation concerns:

1. Streamline Operations

Optimize workflows to eliminate inefficiencies, reduce waste, and ensure maximum productivity with minimal resources. How?

• Process audits to identify and eliminate bottlenecks.
• Outsource non-core functions to reduce overhead costs.
• Implement lean management principles.

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2. Implement Cost-Saving Technologies

Leverage affordable and scalable technologies to reduce manual labor and improve efficiency.

• Automate repetitive tasks with tools like robotic process automation (RPA).
• Use AI for predictive analytics to make data-driven decisions.
• Upgrade to cloud-based systems for better scalability and lower IT infrastructure costs.

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3. Renegotiate Supplier Contracts

Work with suppliers to secure better terms, discounts, extended payment terms, or volume pricing.

• Consolidate purchases with fewer suppliers to increase bargaining power.
• Source from multiple suppliers to foster competition and improve terms.
• Explore local or regional suppliers to reduce shipping and logistics costs.

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4. Adjust Pricing Strategies

Find the right balance between raising prices to reflect higher costs and maintaining customer loyalty.

• Implement incremental price increases rather than large spikes.
• Introduce value-added services to justify price changes.
• Offer tiered pricing or subscription models to maintain flexibility for customers.

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5. Reduce Energy and Utility Expenses

Optimizing energy usage to mitigate the impact of rising energy costs.

• Switch to energy-efficient equipment and lighting.
• Explore renewable energy options, like installing solar panels.
• Conduct energy audits to identify savings opportunities.

6. Optimize Inventory Management

7. Tighten Budget Controls

8. Diversify Revenue Streams

9. Strengthen Cash Flow Management

10. Train and Engage Employees

Blah. Blah. Blah

This list is similar to every other Cost Management list for the last four decades (except for AI and RPA). These strategies are familiar, proven, and logical, so they are bound to be just what you need. Right?

Well, consider this…

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→ If the 10 tactics are so effective, why are businesses struggling to meet revenue goals? Why has the percentage of failed businesses not drastically reduced over the last several decades?

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→ Leaders' top priority in 2023 was preparing for a Recession (See the January 2023 newsletter?here). Not only did the recession not happen, but two years later, cost management and inflation are top priorities for 2025. Inflation’s juxtaposition with the recession is so unusual that it’s flat-out weird!

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Who can you trust?

Different Results Require Different Thinking

The experts’ advice may sound familiar because it is. Outside of Peripheral Thinkers?, it is meant for the masses—the lowest common denominator.

Not exactly innovative. It’s better labeled as “survival tips for the uninspired.”

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Let’s shake it up a little. Here are a few unconventional options to consider. They are not entirely from the periphery but provide more inventive starting points than the blah, blah, blah above.?

1. Implement a "Bring Your Own Everything" (BYOE) Policy

Extend the "Bring Your Own Device" (BYOD) trend to encompass workspaces, tools, and utilities, reducing fixed costs. Encourage remote or hybrid employees to work from home and utilize their own furniture, internet, and office supplies. Offer stipends for specific items instead of providing complete office setups. This isn’t revolutionary, but when combined with some of the following suggestions and applied uniquely, you are miles ahead of your ‘follow the pack’ competitors.

Consider offering employees training about available tax deductions for working from home.

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2. Sell Excess Operational Data as a Revenue Stream

Monetize unused or excess operational data by selling it to third parties, such as market research firms or industry organizations. Where appropriate, identify valuable data streams, such as customer trends, operational performance metrics, or supply chain insights. Partner with firms interested in acquiring anonymized, aggregated datasets.

Generate additional revenue from a previously untapped asset to offset inflationary costs without impacting core business operations.

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3. Offer "Inflation Mitigation Services" to Customers

Position your business as an inflation fighter by creating value-added services that directly address inflationary concerns for customers. Develop subscription services that lock in future pricing or offer bulk-buy discounts. Introduce “inflation insurance,” where customers pay a small premium to guarantee stable prices for a fixed term.

If inflation concerns your customers, positioning your business this way will attract cost-conscious customers seeking stability during inflationary periods. It can also build customer loyalty while creating predictable revenue streams.

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4. Utilizing the “Asset Swapping Economy”

Engaging in direct asset swaps with other businesses to acquire what you need without cash outlay. Swap underutilized equipment, office space, or inventory with other businesses that have complementary needs. You can formalize agreements using barter or asset exchange platforms.

While this saves cash and unlocks value from idle or depreciating assets, it may also create new cross-industry partnerships and resource sharing. Imagine where that might take you.

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5. Gamify Price Adjustments for Customers

Gamification allows customers to determine discounts or price increases. Set up games, quizzes, or challenges where customers “win” discounts. This locks them into purchases while controlling the impact of inflation. Gamification softens the blow of price increases by making the process engaging and interactive. It also encourages higher purchase volumes or specific uses of your solutions as customers seek to “win” better deals.

Use gamification to attract the right customers and reward the best uses of your products and services. For long-standing customers, introduce loyalty games where they can earn points to secure future price protections.

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Here's where Peripheral Thinkers? shift into another gear and leave the competition behind...

Combine elements of the above to create a unique, innovative approach.

EXAMPLE

Offer a BYOE option for customers that also allows you to collect additional data on your customers and their industries. Add gamification to your solutions to increase usage and capture all the data points about that usage—for who, by whom, resulting in what. Then, the expanded anonymized, aggregated datasets can be offered for sale, barter, or as an asset for fixed-price/fixed-term customer agreements.

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Now What?

Look… There are dozens more unconventional approaches to consider.

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Just remember that your strength is:

1.????? Recognizing patterns (like by the time something becomes a trend, it’s commonplace)

2.????? Collecting unconventional options and breaking them down into key elements

3.????? Reassembling different elements from multiple options in unique ways

4.????? Creating innovative answers to the questions while others are still trying to understand

5.????? Setting your path based on a broader, varied, and peripheral view

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Follow your strengths; you don't need to worry about inflation, recession, or the latest trends.

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Until next time… I’ll be looking for you in the periphery!

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?I’m happy to review your 2025 plans and give you some peripheral perspectives.

ONE MORE THING… PLEASE…

For every person who reads this newsletter, follows my posts, or hears my keynote speeches, 3 to 5 people benefit from Peripheral Thinking? insights.

Will you refer me to 10 friends/colleagues to:

• Speak at your/their next event. https://www.pauldanielsjr.com/speaker
• Read the newsletter.

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THANK YOU!

?? 2024 Paul Daniels, Jr. & Peripheral Thinkers?