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Recently we have seen increasing interest rates, the largest monthly house price fall for nearly 14 years by 3.4%, and businesses and individuals paying the highest tax burden since the 1960s.
Times are likely to remain challenging for many businesses, however history shows us that when things are difficult, genuine quality always rises to the surface.
So what do businesses have to do to ensure that they succeed in the present economic environment?
The changing nature of the economy presents a whole series of questions for any business:
There is no ‘one size fit all’ answer to these questions. Different businesses will have different requirements and here are some things we have learned from quality businesses that are successful:
Put customers first:
For the next few years, arguably more than ever, companies need to understand their customers in order to respond to their needs and the pressures they are facing. Household income has been squeezed; some experts predict it will continue to be the case until 2024.
For most consumer-facing businesses, that means offering value for the customer.
The key here is to invest time in understanding your customer spending patterns and their needs.
Take some time out to research these needs, look at how you satisfy these currently and what you could do to improve your offering. Think of ways you can change the delivery of your product or service.
These could be simple things like discussing your offering with the customer before providing it, letting them know how things are progressing, or calling them up to make sure everything went OK after delivery.
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 re-branding some of your offerings and selling them abroad or online. What new income streams are available to you? How can you take advantage of them?
Control your costs:
Keeping the cash coming into a business 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 on a monthly basis is key to good control of your business.
Look at the way you do things. Are there alternatives?
Consider alternative suppliers, alternative payment schedules, better use of electronic point of sale, stock management and quality control.
Sit down with us and discuss your strategy for controlling costs and the management of these. Brainstorm how you can do things more quickly and more efficiently and formulate a strategy for the next year.
Manage your employees:
One of the biggest costs for firms is the cost of employment. Taking on new staff is expensive; it’s 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 and consider 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.
The Blueprint for success?
There is no single answer but there are a few general principles. 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 remainder of 2023, there will still be plenty of opportunities, so please talk to us about your plans. We have considerable experience of helping our clients be successful!
Brearley & Co Accountants are pleased to offer a free, no obligation, initial consultation with one of our experts who will be happy to discuss your business needs and how we can help you.Contact