Zero-Based Thinking: Your Competitive Edge In 2025

CARTER REPORTS

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I know you're busy. Carter Reports is now formatted into a One Must-Read newsletter. Each week I will send you one story and explain why it's worth your time. My choices include key issues for growing companies; different points of view, and hidden gems. These are the stories I know will give you a competitive edge.

This week’s article is an urgent call-to-action for leaders who must choose between leading change or being left behind by it. See why zero-based thinking matters now. Check out five key areas to apply it in your business for a competitive edge.

Reminder: I'd love to hear what you're dealing with. Hit reply and let me know if you have suggested topics for future newsletters.

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One Must-Read Article

Zero-Based Thinking: Your Competitive Edge In 2025

Our business landscape has fundamentally shifted. While the economy continues to grow, inflation and regulatory uncertainty remain key concerns, with 57% of small business owners stating the economy is weaker than it was a year ago. With rising operational costs, economic uncertainty, and recent supply chain disruptions, small business owners are rethinking strategy.

But here’s the thing: there is opportunity in the mist of adversity for those bold enough to think differently – a common theme in Chinese philosophy.

The Answers Have Changed

Albert Einstein once gave the same physics exam to his advanced class two years in a row. When questioned about this, he replied simply: “The answers have changed.” In Einstein’s rapidly evolving field, new breakthroughs meant yesterday’s solutions were already obsolete.

Your business faces the same reality today. The strategies that worked five years ago, or even last year, may no longer serve you. Generative AI tools are transforming organizations, offering new ways to enhance productivity, support decision-making, and deliver innovative products and services. Ninety-one percent of small and medium businesses with AI say it boosts their revenue, with AI adoption among small businesses surging 41% in 2025.

The question isn’t whether change is coming—it’s whether you’ll lead it or let it leave you behind.

Enter Zero-Based Thinking

Zero-Based Thinking, a principle from business strategist Brian Tracy, asks one powerful question: “Knowing what you know now, what would you do differently, start, or eliminate in your business?”

This isn’t about incremental improvements. It’s about approaching your business with fresh eyes, as if you were starting from scratch today. What would you build? What would you avoid? What opportunities would you seize?

Why Zero-Based Thinking Matters Now

Today’s successful entrepreneurs share one trait: they’re intensely future-oriented. They refuse to dwell on what worked before and instead focus on what they can control to create the future they want.

Consider these realities facing your business:

Technology is democratizing competition. Over 50% of small businesses are exploring AI implementation in their operations, leveling the playing field between scrappy startups and established players.

Customer expectations have evolved. Customer service shows 37% faster responses and 35% less overwhelmed agents when AI is used as a support tool. Your customers now expect speed, personalization, and seamless digital experiences.

Supply chains demand agility. More small businesses are shifting towards domestic manufacturing and localized supply chains due to ongoing challenges with tariffs, shipping delays, and geopolitical tensions.

Financial planning is critical. Inflation, hiring struggles, and financial roadblocks continue to be top concerns, with more entrepreneurs viewing business ownership as a long-term investment, not just a career move.

Applying Zero-Based Thinking To Your Business

Start with these key areas:

Business Model: If you launched today, would you choose the same revenue streams, pricing structure, or delivery methods? 89% of small businesses are leveraging AI, especially for automating repetitive tasks and improving efficiency. What could automation free you to focus on?

Team Structure: Are your current roles and responsibilities optimized for today’s challenges? Balancing price adjustments with value-driven customer strategies while managing employee pay expectations is vital to staying competitive.

Customer Segments: Which customers drive the most value and growth? Which relationships drain your resources without adequate return?

Technology Stack: What tools would you choose if building from scratch? Are legacy systems holding you back from the efficiency and insights you need?

Market Position: Where do you have unfair advantages? What makes you indispensable to your ideal customers?

The Power Of Starting Fresh

Zero-Based Thinking isn’t about abandoning everything you’ve built. It’s about consciously choosing what to keep, what to change, and what to eliminate based on current realities rather than past decisions.

The past does not equal the future. Every day, entrepreneurs are building businesses that didn’t exist five years ago, solving problems in ways we never imagined, and creating value in entirely new markets.

Your business has survived everything that’s happened so far. That’s proof of your resilience and adaptability. Now it’s time to harness that same strength to build the business you need for tomorrow.

Here’s My Take

Ask yourself Brian Tracy’s fundamental question: “Knowing what I know now, what would I do differently, start, or eliminate in my business?”

Write down your answers. And, as Jim Collins (author of Good to Great) advises: Face the Brutal Facts. Challenge every assumption. Question every “that’s how we’ve always done it” response.

The entrepreneurs who thrive in the coming years won’t be those who cling to yesterday’s playbook. They’ll be the ones who have the courage to start fresh, think boldly, and build the businesses the future demands.

The answers have changed. Make sure your business changes with them.

That’s A Wrap

Successful companies aren't necessarily the smartest or the most well-funded—they're the ones who've learned to work with uncertainty instead of against it. It's not about having all the answers—it's about staying nimble enough to find them as you go.

Reminder: I'd love to hear what you're dealing with. Hit reply and let me know if you have suggested topics for future newsletters

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All the best-

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© 2025 David Paul Carter. Photo Credit: summerphotos | iStock 
Thanks to Claude Sonnet4 for helping me streamline and sharpen the ideas in this article.

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