The economic landscape is proving a challenge to anyone running a business in the UK these days. The GDP is inconsistent, with shifts in global economies and the ongoing cost of living crisis, and then we have the changes in inflation and interest rates on top.
Former President Clinton once said, “It’s the economy, stupid!”, and that holds true whether you´re running a country or a business. So, yes, there will always be challenges and changes when it comes to running a business, but remembering the basics will help keep your (new or old) business running smoothly.
I was recently asked: “What’s the most important advice for running a business in these economically shaky times?” And here’s my best advice to help you get through the second half of 2024.
5 things to make sure you get right in your business in 2024!
Remember the business basics of Cash, Margins, Service, Marketing and Perspective – this really is key to business health.
1. Master cash flow!
Every business needs a healthy flow of cash – it’s the lifeblood that keeps the wheels turning! So, how do you ensure your bank account is always ready for action? It’s all about effective cash management. For most businesses, this means quick invoicing and prompt collection from customers – this is always an area that can be improved and it can make all the difference.
A few cash tips? Consider setting reasonable, yet shorter payment terms to keep that cash coming in promptly. You could also offer discounts for early payments as an incentive too (if it’s feasible for your business).
2. Maximise your margins
Let’s talk about gross profit margin. Imagine you sell something. You have the money you earned from selling it, but you also had to spend some money to make or get that item, right? The gross profit margin is the money you have left after paying those costs.
We usually talk about this as a percentage of the sales. It helps to compare how well you are doing across different products or times. So, check out your percentage and think about how you can make it better such as reducing direct costs by negotiating better prices with suppliers.
3. Provide unforgettable service
Good customer service is a fantastic way to bring in and maintain business. After all, people like to buy from real people who offer a friendly and personable service. How you do the job is just as important as what the job is, so delivering top-notch service can set you apart from competitors. Not to mention, you can even charge more!
Your aim should always be to be better, especially better than your competitors. It seems like an obvious answer, but how often has poor service ruined your shopping experience? Or forced you to go elsewhere?
4. Be strategic with your marketing
No matter what stage you’re at with running your business, marketing is crucial. It’s a bit tricky since you never know what will work, but consistency is key. One social media post or one leaflet drop just won’t cut it!
The same is true for when times are hard. It can be really tempting to reduce expenses and one of the first things to go is marketing, but this is when you should be doing plenty. How will you attract new customers otherwise? During an economic downturn, speak to your customers to identify their current pain points, look at what others are doing, seek some professional advice, and diversify your marketing strategies. You need a consistent programme of marketing interactions.
5. Get a different perspective
When you’re running a business, you are almost always too close to the wood to see the trees! This is why stepping back from daily operations and looking strategically at how you run your business can be so invaluable.
Ever taken a step back to see how your business is really doing? It´s so essential to get perspective. Start by reviewing your business plan against what is actually happening – this is like holding up a mirror to your operations, and if things aren´t going as planned, it gives you a chance to tweak and adjust. If you’ve made some changes on the fly, it also makes sure you update your plan.
Engaging with an external advisor can also be a game changer. I know you’re thinking, ‘Of course he’d say this’, as it´s one of the services I sell, but we also use external advisors! That´s how much we believe in this. Whether you need monthly or quarterly help or just a one-off deep dive session with an advisor, having a fresh pair of eyes on your business can really make a difference. It can be the thing that gets you out of slump and unlocks your growth!
6. Bonus tip: think 1% improvements!
When the economy is kicking you in the behind, it can feel overwhelming, but just remember: you don´t have to make huge changes to outshine your competition. Small and sustainable improvements can lead to winning more business and achieving greater success, so think about better habits consistently.
Keep your business running through thick and thin
Running a business with the ups and downs of the economy can seem like a wild adventure. But with some smart moves and the willingness to learn and adapt, you can enjoy the ride. It’s all about managing your money well, making the most of every sale, delivering awesome service, and getting the word out about your business in different ways. And remember, taking a step back to look at how things are going and asking for advice can be super helpful. Small changes really can make a big difference!
Need help?
There’s more to explore beyond these bullet points, so if you fancy a chat to see how I can help you during these tough times, feel free to reach out! Book your 30-minute meeting here, and we´ll see if we are the right advisers for you.
