There’s no doubt that business confidence in the UK (and particularly the north of England) continues to be weighed down by the wider economic climate, with this depreciating 39 points to 3% during the latest reporting.
This is likely to worsen too, as energy prices continue to spiral for business owners, and projected inflation of 18.6% in January is likely to squeeze the consumer period spending further.
However, while such trials and tribulations may be relatively extreme, they’re also part and parcel of maintaining a business. So, what steps can you take to deal with such challenges and continue to thrive over time?
Optimizing Your Access to Cash
For your business to thrive during difficult or economically turbulent times, it’s imperative that you have optimal access to cash.
This is especially true in the case of small businesses, which tend to lack access to credit or existing resources and often struggle to trade due to a restricted cash flow.
Ultimately, having ready access to cash makes it easier to fund your operation and build towards the future, while scaling quickly as and when the opportunity arises.
In order to optimize your real-time cash flow, you could consider taking out a short-term business loan on favourable terms or consider similar funding vehicles such as invoice financing or factoring.
Evaluating Your Business Model
Your company’s business model may also come under scrutiny during challenging times, especially if this offers the opportunity to make fiscal savings or optimize efficiency.
We’ve already witnessed how companies can look to adapt their business models during the rise of e-commerce through the digital age.
More specifically, many established retailers have transitioned at least part of their business online as a way of reducing their overheads and capitalizing on the rise of e-commerce. To this end, the UK’s e-commerce market generated revenue of $117.7 billion last year, while growth of 12% highlighted just how many consumers now source, research, and purchase goods online.
So, take stock of your business model and try to identify ways in which this can be made more cost-effective or profitable over time.
Pick the Right Team
For most businesses (even SMEs), payroll remains one of the largest and most significant expenses and one that funds a functional team of employees that complete work and offer utility.
However, maintaining a full-time staff team can create a massive financial burden during times of economic downturn, as demand and revenue fall, and your outlay becomes disproportionate to your income.
In this case, you may need to focus on reducing or restructuring your team, perhaps by minimizing the number of permanent employees and instead relying on freelance creators. Similarly, you could employ experienced staff members with a broader range of skills, improving productivity within a smaller team.
Just try to avoid reducing your number of employees too quickly or taking action that’s too drastic, as this can reduce your team’s capacity and leave you unable to meet real-time demand.
Keep Track of the Competition
Even in emerging markets, there will always be competition and it is imperative that you become aware of these so that they don’t pass you by.
Analyzing the performance of your top competitors can provide you with useful insight into how they are operating and what makes them profitable – find out what they are offering to their clients and what can you do to gather attention or attract them to your business instead.
Accept that your business plan might not be right for you, learn from your mistakes, and strive to remain ahead of the curve.
Raise Awareness of your Business
Clients and customers won’t be aware of your products and services if they are not told about them, which is why your presence and visibility both online and offline is so important in the current climate.
Enhance your website to include all the necessary information for clients clearly and make it easy to locate from the homepage.
You may decide to optimize your SEO strategy and start a blog on your website, providing visitors with useful and relevant content regularly. Try to gain backlinks from other websites if you have worked with them previously, or you can offer them informative content to post on their sites and link back to you.
Social media is also very important, with the majority of users spending over two hours per day on social media platforms. It is in your best interest to therefore communicate with your followers regularly, posting updates for any important milestones or offers.
These individuals may leave comments or share your posts with their followers, creating a chain reaction where your business will likely increase its brand awareness.
Be Aware of Changes in the Economy
Economic changes can have a drastic effect on the performance of any business, which is why you must remain up-to-date regarding the latest news. The UK choosing to leave the EU and the more recent economic crisis means businesses need to be decisive and informed when making judgments.
If your business appears to be failing or struggling, you need to take a step back and evaluate the bigger picture, rather than focus on one matter. There are some aspects that you have no control over, so ensure you do what you can and remain confident in your business.