Times are tough and they are likely to remain challenging for the foreseeable future. So what do businesses have to do to ensure that they succeed in the economic environment of the next two years?
The changing nature of the economy presents a whole series of questions for any business:
- What finance will it need in the short term and to invest?
- What are the challenges of entering and maintaining export and/or new markets?
- How does it develop new and innovative income streams?
- How can it manage its workforce through the peaks and troughs of activity?
There is no one-size-fits-all answer to these questions. Different businesses will have different requirements, however there are several strategies that are worth considering over the next 24 months.
Put customers first:
For the next few years, companies need to understand their customers and be able to respond to their needs and the pressures they are facing. Household income has been squeezed and some experts predict it will continue to be the case until 2024. For most consumer-facing businesses, that means offering value for your customers.
The key here is to invest time in understanding your customers’ spending patterns and their needs. Take some time to research these needs and look at how you currently satisfy them and what you could do to improve your offering. Think of ways you can change the delivery of your product or service. Simple things like discussing your offering with the customer before providing it, letting them know how things are progressing, and calling them to make sure everything went OK after delivery are small ways you can identify what the customer wants and needs.
Constant communication with your customers before, during and after the sale is a key factor for successful business in tough times. Ask yourself what you could do to improve this in your business.
Take time to seek out new revenue streams. Consider rebranding some of your offerings and selling abroad or online. What new income streams are available to you and how can you take advantage of them?
Control your costs:
Keeping the cash coming is fundamental, but so is controlling the rate at which the cash flows out. Take time to think about your costs and what you could do to improve the way you manage your business. Regular review of targets to actual costs is key to good control of your business.
Look at the way you do things and whether there are better alternatives. Consider alternative suppliers, alternative payment schedules, and better use of electronic point of sale, stock management and quality control.
Manage your employees:
One of the biggest costs for firms is the cost of employment. Taking on new staff is expensive, equivalent to fresh investment in the business. Many successful businesses are reviewing the value they get from their employees and are taking time to discuss how they can be more customer focused and efficient in their roles.
Look at alternatives to salary rises, such as the use of performance-related pay and a bonus structure that rewards both good service to customers and increases in sales. Get all employees involved in how the business can improve and do this regularly.
There is no single answer to successfully riding out the current tough economic climate, but there are some general principles to follow. Be flexible, but also be alert to the dangers. Successful businesses of the future will be fast on their feet but also aware of the risks. They will be lean and efficient. They will be the ones who spot and take advantage of the opportunities that are there.
As tough as the economic outlook appears for the coming years, there will still be plenty of opportunities so please talk to us about your plans – we have considerable experience in helping our clients achieve success!
