What is the Metaverse and How Will It Impact Your Business?
“Metaverse isn’t a thing a company builds. It’s the next chapter of the internet overall” (Mark Zuckerberg, Meta)
Among businesses, one of the most misunderstood aspects at the moment is ‘The Metaverse’. Businesses that do understand this new phase of the internet are currently seizing opportunities that their competition doesn’t even know exist. This is beginning to change the face of business and social interaction around the world. But what is the Metaverse and why should you be paying attention?
What is the Metaverse?
Quite simply, the metaverse is an extension of the current internet. It is a virtual three-dimensional space where people can interact with one another by developing 3D avatars. This space can take on the appearance of numerous real-world places, such as meeting rooms or concerts, or even more fantastical spaces. It is a fully immersive space on the internet
A blend of virtual reality, second lifestyle online worlds and augmented reality, the Metaverse can be accessed using a simple smartphone or laptop. This makes it extremely accessible for everyone.
What will it be used for?
No one knows for sure just how wide the eventual use case will be, but it will no doubt be huge. Some diverse examples will help illustrate just how fundamentally this might affect our lives and businesses:
- Advertising and marketing – finding new customers and communicating with them;
- The average person in the street – who may use it as a virtual reality gaming platform, or a place to attend a concert by an artist they would otherwise never get to see;
- Businesses tapping into machine learning and AI to incorporate multiple, diverse data sets into a virtual space to improve presentations and decision making;
- Surgeons from around the world all interacting over a patient’s scans;
- Classrooms exploring the James Webb telescope images in 3D projections they can fly through;
- Immersive in-depth product demonstrations;
- Interactive TV shows;
- Remote maintenance assistance to areas where technicians are usually unavailable; or
- News production that puts viewers seemingly on the spot.
At the moment, the opportunities seem unlimited.
Watch for example The Economist’s “How will businesses use the metaverse?” on YouTube.
How will this affect your business?
At the moment only a small percentage of businesses are using, or even aware of the Metaverse, but this is set to change. A recent Gartner Marketing Survey found that 35% of consumers have never heard of the Metaverse but as per projections, Gartner expects that by 2026, 25% of people will spend at least one hour a day in the Metaverse for work, shopping, education, social media, and entertainment etc. Be ready to adapt!
Here are just a few areas the rapidly developing Metaverse may impact your industry:
Remote work
Using the Metaverse for remote work will involve more than simply creating a virtual office to connect teams that may be working from home. Short, interactive virtual reality meet-ups could allow chats between colleagues and facilitate gatherings with, for example, a comedian or musician for entertainment.
Three-dimensional online shopping
Online shopping has the distinct downside of not allowing customers to interact with what they are buying. They are unable to visualise the object or get a sense of just what it may look like in their homes. Interactive 3D shopping will start narrowing this gap.
Manufacturing
Prototyping and product testing can be accelerated online. Factory layouts and warehousing can be tested for efficiency and raw materials can be sourced and shipped more easily and with fewer delays.
Streamlined workflows and cost optimisation
In a virtual world of in-depth, real and accurate simulators, employee training, onboarding and orientation need no longer take as much time as they once did. Everything from how to work your unique machinery to pitching the product to clients can be done in quantifiable virtual simulations.
Better sales
Advertising at the moment is all about connecting emotionally and drawing the consumer into the world of the brand. Imagine how much easier this will be when you can invite the customer into a virtual world to experience a tailor-made experience?
Global market for talent
Companies that operate out of countries with weaker currencies are going to find it increasingly difficult to source the staff they need. As the Metaverse draws the world together, those with talent and skills are going to be able to work remotely wherever they like and that will generally be in the places that pay them better. Everything from HR policies to salaries and benefits will need to change.
What is abundantly clear is that businesses that fail to adapt to the sea-change coming with the Metaverse will find themselves facing precarious times, as did those who failed to adapt to the internet.
The Metaverse is coming. Will you be ready?
The Why and the How of Annual Price Increases
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It is imperative that businesses increase their fees, rates or product prices annually by at least the rate of inflation, just to keep pace with the ongoing increases in the cost of materials and production.
Inflation is the increase in the cost of goods and services in an economy. It ensures that, year after year, a business pays more and more for the same goods or services it uses in the production of its income. The higher the inflation rate, the higher the increase in your costs each year.
Without related annual price increases on goods or services provided by your business, the inflationary increases in the costs of production will result in lower profits, reduced product or service quality, or even market perceptions that your goods or services are cheap. In addition, the compounding impact of not increasing prices means your business falls progressively further behind in its ability to generate the appropriate and needed levels of profits.
Why do businesses neglect price increases?
There are many reasons why businesses do not increase their rates annually. Some may simply not have the business skills to set or maintain correct pricing. Many business owners are concerned that in a highly competitive market, a price increase will result in lost customers – a fear that was particularly heightened during the COVID years. Most businesses may simply not know how to increase their prices, especially if they have not done so for a few years, and then a substantial increase is required just to return to previous levels of profitability.
Why increases are crucial
In South Africa, the inflation rate is currently at a 13-year high of 7.5% – almost double the average inflation rate of 4.5% in 2021. This means that the cost of producing goods and services has increased by 12% over just two years, and without a related increase in sales prices, your business profits are being eroded at an alarming rate and with every sale.
Conversely, increasing prices correctly can have a substantial impact on a company’s profitability. Studies quoted in The Harvard Business Review found that improvements in price typically have three to four times the effect on profitability as proportionate increases in volume. In fact, it was noted that a 1% improvement in price, assuming no loss of volume, increases operating profit by 11.1%.
Top tips for implementing price increases
- Speak to your accountant about the impact of various price increases on your company’s income, profitability and tax liabilities.
- Remember to discuss the potential impact of price increases with all staff, from the production team to marketing, sales and the accounts teams.
- An easy place to start raising prices is to issue quotes for new business at the higher prices.
- Include an annual price increase clause in all new client contracts and in contracts that are being renewed.
- For existing clients, ensure that any price increase is communicated clearly, accurately and well in advance.
- Link the price increase to improving or at least maintaining the value your clients perceive, for example, the use of co-friendly materials, unique expertise in an industry or high-quality products.
- When implementing a price increase, consider adding extra value to a client, such as a free consultation, free deliveries or improved packaging or wrapping.
- Once a price increase has been finalised, update all relevant sales documents, website pages, POS systems and the like.
Your Tax Deadlines for November 2022
- 7 November – Monthly PAYE submissions and payments
- 25 November – VAT manual submissions and payments
- 29 November – Excise Duty payments
- 30 November – Value-Added Tax (VAT) electronic submissions and payments & CIT Provisional payments.
