Tips from Philippa in an economic slowdown
As we continue through this quarter, it’s good to remind ourselves that even though we are in a middle of this economic slowdown, there are things we can do to make sure we come out on the other side better off. It won’t be like this forever!
Your mindset is really important right now. Being realistic and knowing what you can and can’t control is vital to your health. You don’t need to be in growth mode all the time. It’s ok to just be in the present but you must know where you want to go.
The next 6-12 months are likely going to be the same. Interest rates will remain high, everything is expensive. We’re going to be here for some time, so don’t be surprised. Be prepared.
Don’t get caught up in the media noise. There can be so much doom and gloom around us. In the news, in the papers, online platforms. You need to look at your own numbers and your own data. What is your bank account looking like? If your numbers are ok and looking good, don’t get caught up in the downward negativity of others.
There are going to be challenges that crop up and issues that need to be factored into your business plan, your strategy and your own personal thinking.
So, what can you do to beat these challenges and make the journey as frictionless as possible?
8 proactive ways to overcome your business challenges
- Look at your pipeline: looking forward, can you continue to fill your pipeline with the work you want to do, not just the work you have to do? And can you do this with the team you’ve got?
- Plan ahead – for the next 6, 9 and 12 months. Also look at the other side – what does your business look like in 2 years or 5 years?
- Uncertainty is real: No-one has a crystal ball to know exactly what’s coming around the corner. But there are ways to be prepared for some unknown circumstances. You can’t fully predict the main external threats like government policy, economic conditions, or freak weather conditions. But you CAN use forecasting and scenario-planning tools to build up contingency plans so you have a Plan A, Plan B and even a Plan C. With forecasts of your business data, finances and industry trends, you can be ready to react, pivot and take positive action.
- Competition: Don’t view competition as a bad thing. Small businesses often face stiff competition from larger, more established companies. To stay ahead of the curve, it’s important to be nimble and agile. It’s also vital to find your niche and to know precisely why your customers value your offering. By ploughing a unique furrow and keeping your customers happy, you can give yourself an edge over larger, slower-moving corporate-size competitors.
- Access to capital: It can be a struggle to secure funding as a startup, particularly if you have limited financial resources or a poor credit history. Having a detailed funding strategy is a crucial way to overcome this problem. Keep your finances in order and make sure you have in-depth financial reports to show banks, lenders and investors. It’s also helpful to focus on paying suppliers on time, keeping debt levels under control and ensuring your cashflow is in a positive position. These are all excellent ways to improve your business credit rating and show you’re a stable, risk-free prospect for lenders.
- Look after your staff: This will create a bit of worry for your staff. Have the conversations with them and keep them in the loop of any major adjustments. If you’re looking at hiring new staff, offering competitive salaries or benefits packages can be one way to attract people. But it’s also important to think about your brand reputation, your sustainability credentials and your CSR policy – all things that Millennial and Gen Z workers value alongside decent pay and benefits. Employees want to be proud of where they work, so make your company a progressive, satisfying and rewarding place to work.
- Keeping up with technology: Business technology is evolving at a rapid pace. It can be daunting keeping up with all the available apps, tools and software solutions that are aimed at your business. The trick is to be informed but selective about the apps you use. Start with the operational and financial needs of the business and look for apps that can automate, improve efficiency or provide improved data and management information. Talk to other business owners and your professional network to find out what the essential apps are in your industry. And do your research and homework before you choose any software solution to add to your app stack.
- Don’t stop. This is probably the most important point we can make right now. It’s ok to pause and rethink but research has shown that businesses who stop marketing, stop training employees, stop spending on functions that can help keep them going, are the ones who don’t survive the other end of this downturn.
Talk to us about being an agile small business
As your adviser, we can work with you to plan through these challenging times, forecast how your business decisions convert into figures, help keep you agile and ready for what lies around the corner.
Call us to arrange a meeting and let’s help you plan your business future.