Times of turbulence and uncertainty can either mean bad news for small businesses or can be a time of growth and opportunity. Apparently, there’s a major cloud named after some a breakfast snack, hanging over the UK economy that is causing significant uncertainty and having an impact on the ability of businesses to raise finance and plan properly for the future. Political leanings aside, there’s clearly doubt about the future growth of the UK economy. So, we’ve decided to look into ways and means a business might thrive in times like these.
If you’re a small business owner or entrepreneur, chances are you stand a better chance of overcoming and thriving in times of economic uncertainty than your larger competitors. This is largely due to your size so logistically speaking, it’s easier for you to adapt and implement change within your business. You’re more likely to be able to quickly adopt new technologies, systems and processes.
Tips for growth in uncertainty
Sales and pricing models
Times of uncertainty can put extra pressure on pricing and profit margins. The result of uncertainty in the economic environment potentially means that consumers and customers are spending less, or at least being a bit more conservative with their spending. So, if your customers are tightening their belts, you’ll need to consider whether they can still afford your product or service and what you’re going to do to try and maintain and even grow your client base.
- Avoid a price war
Too often businesses react to a drop in sales by immediately reducing prices. This seems at first to be a reasonable reaction, however reducing your prices whilst not being able to, at the same time reduce your costs, will mean your margins are squeezed even further. This will cause a ‘race to the bottom’ amongst competitors. Instead of reducing prices look at ways to add value to your product or service. By doing this you’ll protect your margins, maintain many of your customers and when things pick up again, you’ll have a better product, a more loyal customer base and a better base from which to expand later.
- Invest Marketing and PR
No need to sell a kidney, but don’t completely neglect this side of the business. Look into ways of raising your online profile, contact local newspapers and influencers to get them to tell your story. Getting your story out in local press etc is much easier than you’d imagine, simply ensure you have a good story and write a comprehensive press release or article and send it round.
- Take time to understand the customer
In an effort to add value you first need to ensure you understand your customer and why they buy your product and what other factors influence that decision and others they need to make in their lives. Spend time with your clients understand their business (if you’re B2B) or if you’re B2C engage with them when they come through the door, or through your various communication channels.
Operational Efficiency
- Make your team agile
Make sure that your team are as productive as they can be, seek out team members that have additional capacity and get them to cover other areas that need attention. Having a team that are able to work across multiple areas of the business will not only help make your business more efficient but will also allow team members the opportunity to build skills in other areas of the business.
- Invest in Tech
Research technology and innovations that can help save your team time and your business money. Question why manual tasks are done as they are, step back and look at whether there are ways to optimise and improve these processes without increasing the costs. Just because a task is done in a particular way because ‘that’s how its always been done’, doesn’t mean it’s the most efficient way. If you haven’t yet started using cloud accounting software, file management applications or smart CRMs start with these areas and work through the business.
Finance
- Prepare for fluctuations in cashflow
Depending on your strategy to see throw the uncertainty, you might need to invest in buying product in earlier and in bulk, resulting a rise in the need for cash. So, your cashflow might vary from what your business is used to. Make sure that you keep well maintained cashflow forecasts so that you are able to plan ahead for these spikes and troughs. Brexit may be at the top of many business owners’ minds for now, but cash will always be king in business.
- Careful with the knife
Cutting costs is a good idea, but be careful where you cut. Look first to cut costs for things that are not crucial to your ongoing business structure and day to day operations. If you cut too deep or into the wrong areas of the business you’ll damage your ability to grow later, as you may find that you’ve eroded key areas of the business. Start first with renegotiating terms and prices with suppliers, look at switching suppliers and utility providers. It’s likely that there are plenty of other businesses out their offering some bargains.
With the right mentality, the ability to seek out opportunity and the right attitude to risk, it’s possible to see your business not only survive uncertain economic times, but for it to thrive. And if you’re a small business owner or entrepreneur, the chances are you meet all these criteria already, just make sure your keep your eye on the prize.
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