Chief Executive at TEDCO Business Support, Carole White
Anyone who has ever attempted to run a business knows that life as an entrepreneur is rarely smooth sailing.
Setbacks and scares are all part of the process, especially during times when the economic and political landscape are, shall we say, turbulent.
Dealing with periods of uncertainty and unfamiliarity can present a real challenge to even the most competent business owner.
In my experience, businesses that survive times of turmoil tend to be the ones that have a plan.
Yes, it’s very difficult to predict the future during these periods but there is a lot to be said for “controlling the controllables” where possible.
I’ve set out a few key points to help your navigate challenging economic and political times.
How to handle uncertainty
No issue has dominated conversation in recent years like Brexit.
No matter which side of the referendum fence you sit on, one thing we can all agree on is that uncertainty is generally bad for business.
The latest figures from the Office of National Statistics reveal that many aspects of the UK’s commercial sector have halted in the face of continued Brexit uncertainty.
Job creation has slowed, and the slowing of inflation suggests that companies are waiting for the outcome of Brexit to be made clear before making any decisions on future pricing.
In light of issues like Brexit, it’s easy to feel a little lost and helpless. However, as an entrepreneur, it is important to create a framework within which you can still trade effectively.
A simple starting point might be to take stock of your cash flow and assess whether you’re bank balance can weather any upcoming storms. Now is a good time to build those savings to protect against any unforeseen downturns.
Another step that many small business owners are taking is to take closer control of credit terms – ensuring that a company hasn’t overextended and isn’t exposed to more risk than necessary.
The key here is to protect your organisation first and ensure that you aren’t at the mercy of another business that might be more susceptible to market conditions.
Small businesses can also take inspiration from larger organisations and look at a hedging strategy.
This involves rebalancing your business assets to spread risk. While you might not be in a position to move operations to different parts of the world like a Sony or Jaguar Land Rover, perhaps diversifying product offerings or working with a broad range of industries will improve your risk profile.
‘Business continuity’ is more than a buzzword
Business continuity is something that many SMEs believe is reserved for large organisations.
But the truth is that a small organisation is just as susceptible to theft, natural disasters and supply chain malfunctions as their larger counterparts.
Cybersecurity is one of the leading concerns for the modern business, and experts unanimously agree that preventative measures are far less costly and time-consuming than recovering from a data breach or virus.
32% of businesses identified breaches or attacks in the last 12 months, resulting in an average annual cost per business of £4,180, according to the Cyber Security Breaches Survey 2019.
It’s well worth asking yourself the question: should I take steps to manage security, maintain compliance and mitigate risk now or foot the bill for a disaster later?
No business owner is an island: do more to motivate your team
A business is only as good as its team.
Maintaining motivation within your business is one of the most effective methods of seeing your business through tough times.
By recognizing and rewarding hard work, creating a positive environment and providing supportive leadership, you can improve productivity and achieve growth at a time when profitability is key.
One study from the University of Warwick found that happy employees delivered a 12% spike in productivity, while unhappy workers were 10% less productive than average.
In difficult times those percentages can easily mean the difference between a successful financial year and a business folding.
By strengthening your business for now, and preparing your business for the future, you can create a brand that’s as resilient as your passion for its success.
There are a number of North East businesses that can help strengthen your business and help you navigate challenging economic and political times. Like the Innovation SuperNetwork who help support regional businesses for free through growth strategies, funding and connections.