Winner of the Sustainability Award for 2018, category for medium enterprises
The perils of depending on the next sale
Sign a new deal today; move on to the next deal tomorrow. The incessant search for the next sale keeps many business owners awake at night – and so it should. As long as the focus is on finding the next house to build, the next passenger to fly or the next restaurant meal to serve, sustainability will probably remain elusive.
Prospects for such businesses start looking even more precarious in a higher risk environment of the VUCA variety – volatility, uncertainty, complexity and ambiguity – like the one in which South Africa now finds itself.
“Right now, how do you run a business that can withstand the ups and downs? One way is to make sure that your income is not entirely dependent on new sales. To be a sustainable business, you need a stable line of income,” says Teryl Schroenn, CEO of payroll and HR software company Accsys.
For Accsys, which has been in business since 1981 (and a tt100 finalist and winner every year since 2006), that stable line of income comes from its ability to retain customers beyond the short term and so earn a mix of annuity and contract income.
“Why do people use companies like ourselves? Because our promise is that we’re going to keep you up to date with statutory requirements. Every time the Budget comes out, our clients have to comply with a new Tax Act, and they rely on our software to do that.”
Bear in mind that Accsys has clients in 19 African countries, which means keeping abreast of the tax and other payroll changes in all those countries.
“If we were not a sustainable business with a stable line of income – annuity income – it would be very difficult to keep on developing new stuff all the time while remaining financially stable.”
Sustainability is not, of course, just about the financial bottom line. “The triple bottom line is always important,” says Teryl. “You really cannot be an island. You do need to be part of an economic tribe and a social tribe. In Accsys’s case, this includes training and skills development for a wider circle than itself, while moving towards paperless operations and doing more recycling.
Such projects need not break the company budget, she adds. “If you can’t do the big things, do small things – everywhere.”