As I am sure many of you have recently read, there is currently a large amount of uncertainty when it comes to the economic future of the UK. With high inflation rates, forever changing fiscal policy, and rapidly increasing energy prices, it can be easy to feel overwhelmed. Especially if you are trying to run a business on top of it all.
It begins to feel like the only certain thing about the economy is that it is going to change. Whilst change is unavoidable, it has been more apparent this year than it has for a long time. Due to the fact these economic booms and busts are inevitable, it is vital to understand the impact they have on your business, and more importantly, be prepared to weather these cycles effectively.
Prioritise Your Profitability
No matter what cycle the economy is in, as well as achieving the mission you set out at the start, it is important that you prioritise profitability. If your business is focused on being profitable, it means you are prepared for difficult periods and save profits in times of growth. Profitability not only provides peace of mind for any economic cycle, but also gives you the freedom to avoid making irrational, damaging money-saving cuts that you might regret later. Contact us today and we discuss different options for your business and how we can help.
Get Ready for Opportunity
As bleak as it can seem, every economic cycle (even recessions) comes with its own unique opportunity. In a boom, you can stockpile cash, hire additional personnel, or move into a larger premises that better suits your needs.
However, busts can lead to a different type of opportunity. Whilst many of your competitors may ‘hunker down’ when growth slows down, your team could focus more intently on your marketing strategy or pivot your efforts to focus more directly on digital marketing. These cycles could help you consider new pricing tiers, new packages or bundles, or new services that you have not previously offered.
What is truly unique about these opportunities is that they can pave the way for more growth. Using a boom to hire more talent allows you to better serve your existing customers and have the capacity to acquire new ones. Purchasing a more fitting premises gives you room to grow and offer new services. Expanding your business can allow you to increase your customer base, team and offer new services. Purchasing new software or digital tools can streamline your efforts, reduce costs, and increase internal efficiency. When you see the opportunity economic growth creates, you can position your business for a boom, expansion, and continued opportunity.
However, while opportunity is an effect of economic growth on business, it is one that must be handled using risk management and making sure that you complete your due diligence.
Opportunity Calls for Common-Sense
Economic booms lead to increased revenue and profitability, which is likely to create some great opportunities for your business. However, these opportunities must be considered carefully. As a business owner, you need to be doing everything you can to prepare your business for an inevitable economic bust. Do not jump at every opportunity that presents itself, you must consider how it will affect your business should the economy take a downturn. This conversation needs to be had with trusted leaders within your business and/or with a trusted consultant at Razor who can provide advice and guidance.
Generally, the effect of economic growth on business is overwhelmingly positive: your business is likely to increase profitability, gain more customers, and have access to opportunities for further growth and expansion. If you approach these opportunities with common-sense and wisdom, you can grow your business and prepare for any downturns that might come around in the future.
Are you worried about the future of your business? Are you doing well but want to ensure you have a plan for difficult times? We are here to help! We will always put you, your business, and your employees’ best interests first. We promise to work alongside you, always allowing you to feel in control of the decisions made. You’ll never feel isolated when working with us, we try to make every experience unlike any other, with our no stress common sense approach.
Please contact us today and have a chat with a member of our team.
Junior Management Consultant