Since the warning signs of tough times are all around, what does this mean for you how can you ensure you win at business?
So far in 2022, inflation has increased by leaps and bounds, and rising interest rates have steadily pushed up. In August, the American Federal Reserve Bank and the European Central Bank increased their base rates. As a result, many quoted companies have issued profit warnings…even if the energy companies have reported record profits!
It is perhaps obvious, but it still needs to be said that every business owner/manager needs to increase their sales, encourage and motivate their staff and monitor their cash. The less obvious point is that you need to do more than you have previously – so what is the “more” you need to do? Here are 5 points to help you deal with tough economic times, particularly rising interest rates.
1. You NEED timely and accurate management information to win at business!
In these volatile trading conditions, SMEs without adequate Management Information are exposed. This applies not only to normal trading but also to SMEs selling up. Those looking to sell may find their Sale Price declining! Stay on top of your performance through timely access to accurate information…and then take action to improve anything that the monthly reports flag up.
2. Credit control has never been more important
The FSB has recently published a survey showing worsening payment trends – don’t be the one left holding a bad debt! Make sure your money is in your bank account and you aren’t offering a free overdraft service to your customers.
3. Be HOT, HOT, HOT on your margins
With rising interest rates and costs increasing all over the place, maintaining control and making a good profit margin is more important than ever. Review all your products or services individually and ensure your profit margins are robust – and review this frequently! Continuous monitoring ensures you deal with little problems before they can escalate into big ones.
4. Increase your sales
In volatile economic times, not every business can expand its sales. So let’s go back to business basics. You can increase your sales by:
- Finding a new customer.
- Bringing out a new product or service.
- Selling additional products/services to existing customers.
- Increasing your prices.
Can you do all four or just one or two?
5. Motivate and encourage your staff
An often-heard saying is that your staff are your greatest asset. But are you making sure you’re paying them properly? Do you thank, encourage and motivate them? Do you provide training and social events? A team is only as good as its weakest link – so make sure your team helps your business to succeed.
Combat rising interest rates to win at business!
Looking for help to improve each of these five points? Then get in touch for your free review!
With inflation and rising interest rates, now is a great time to take stock of your business’s financial situation, seek support from an accountant and assess what other changes might make sense for your business during this time.