Apparently, 75% of technology start-ups fail in their first year, with a failure to adapt to the pace of innovation and industry changes cited as the primary reason for this.

Despite the evolutionary nature of all technology markets, however, the failure to adapt and respond to change is something that can derail business start-ups in numerous industries. This is why many business experts consider adaptability to provide a competitive advantage to modern firms, with fluid and flexible models capable of minimising cost, alleviating risk and optimising growth.

Creating an Adaptable Business Model: How can this drive your Start-up venture?

If you are able to create an adaptable business model that can cope with change while simultaneously fostering growth, you can survive often unforeseen issues such as economic recession, market volatility and spiralling overheads. With this in mind, here are three areas to focus on and a look at how adaptability can optimise the potential of your business start-up:

Consider flexible Business Premises and Working arrangements

Historically, business start-ups have been forced to seek out commercial premises as soon as they have experienced growth. The issue with this is that commercial lease agreements are usually rigid and cover a significant period of time, meaning that they drive considerable overheads and cannot be easily negated. This is hardly ideal for independent business-owners or brand new start-ups, many of whom would prefer to scale and modify their growth plan in line with performance.

Fortunately, start-ups can now benefit from an array of flexible and cost-effective working arrangements. One of the best examples is provided by co-working space, which companies can lease on a rolling contractual basis for a period of days, months and even years. Ideal for digitally-based firms and start-ups with minimal staff, this type of lease agreement drives collaboration and flexibility while also minimising costs.

There are other options too, including the adoption of a virtual address. This is particularly popular for start-ups that operate within a competitive niche, as it enables new ventures to associate themselves with iconic addresses in fields such as technology, finance and banking. This helps to cultivate trust among customers, while also instantly lowering overheads and helping firms to target a global pool of talent.

In terms of more radical steps, you may also want to consider investing in a temporary structure or ‘pop-up’ retail space. This type of structure is completely impermanent and not subjected to a long-term lease, while it also enables companies to utilise the precise amount of space that they require. While this should only ever be considered as a temporary solution for the first year of your venture, it does the provide the opportunity to adapt sooner if your business grows successfully.

Say goodbye to the Overdraft when managing Cash Flow

For generations, small businesses and start-up ventures have struggled to optimise their cash flow. The most popular solution to this is opening an SME overdraft, which enables you to access a form of recurring credit whenever you experience cash flow issues.

While this is far from ideal at the best of times, SME overdrafts have also become increasingly restricted and difficult to access in the wake of the great recession. This is true in major western economies in the U.S and Europe, while the Bank of England also revealed that £5 million ($7.2 million) worth of SME overdrafts have been cut on a daily basis since 2011, as banks have become increasingly wary of excess commercial lending.

While rising levels of sentiment in the Chinese business sector have provided a boost to the global economy, banks are still reluctant to extend the kind of credit that they used to. Despite this, there are variable finance options that provide greater flexibility and lower risk to firms, who can utilise these to avoid becoming indebted to their local bank or building society.

Re-financing existing assets (including equipment and fixtures) is an excellent alternative to securing an overdraft, while it is also an option that can be applied to multiple industries. Another viable, if slightly more controversial, option is to invest in debtor finance, through which start-ups use their accounts receivable as leverage to negate slow-paying invoices and clients. If you have low cash flow or repayment terms of 30 days or longer, debtor finance can help you to fund your venture during the first year of trading.

Crowd-funding may also be a viable option, although this may require you to sacrifice some equity in your company and is not necessarily suited to firms with slow-growing profits and long-term expansion plans.

Employ a flexible and Project-based Workforce

When you launch your business start-up, one of the first things that you will need to do is create an employment infrastructure and recruit a team of staff that can handle your requirements. Make no mistake; this is a costly endeavour that requires a commitment to bottom line salaries, bonus packages and employee liability premiums.

These costs can quickly accumulate, and the issue with investing in permanent contacts is that you will continue to pay a fixed amount even as your workload declines. This will squeeze your profit margins considerably, and it is one of the contributing reasons why so many businesses fail during their first year.

In this respect, the so-called freelance revolution has helped business start-ups to create a more flexible and cost-effective workforce. The prevalence of independent contractors is something that has impacted on numerous developed economies, with an estimated 50% of the American workforce alone expected to be freelancing by the year 2020. As a result of this, firms can capitalise on this trend by establishing a flexible and project-based team of skilled staff members that is augmented by a select-few, permanent employees.

This instantly reduces your annual wage bill, while it also enables you to adapt the skill-sets that exist within your start-up in order to optimise productivity on each individual project. Additionally, it also allows you to source employees from a global talent pool, which is ideal when recruiting in specialist disciplines such as software design and copywriting.

Despite this, you can still keep a small team of permanent staff that is able to handle all strategic business elements such as planning and the implementation of a vision.