Although some of my political and socioeconomic beliefs might not be agreeable to everyone, I strongly suggest that the implications of current decisions being made are fairly certain.
With the US oligarchy increasingly making imperialistic decisions, empowering the likes of Israel, Russia, and China to take advantage of smaller or weaker nations. This will only create more division and combined with the rise of the Right - we should be concerned about what is coming. This division is likely to have ramifications and cause detrimental economic and security impacts globally, potentially affecting many many businesses across the country. For the UK, which is struggling to assert itself in any particular trading group, we are left with very moderate growth forecasts; therefore, SMEs will need to tread carefully.
However, challenging economies can create opportunities for certain businesses. For example, one of my clients, who provides Virtual PA and Bookkeeping services, fills a gap for many smaller businesses that would typically employ a bookkeeper or administrative staff. They now have a flexible, cost-effective alternative, which is increasingly relevant with the impending National Insurance increase and associated liabilities.
So what’s my reason for writing this piece...
It’s to urge business founders and leaders to robustly put in place the foundations for their businesses in order to be equipped to deal with such a scenario.
A good place to start is with this is the four pillars of business (these are highlights rather than an exhaustive list):
Laying Robust Foundations: The Four Pillars of Business
Commercial: How We Win Business
• Strategic Planning: Develop a comprehensive sales and marketing strategy.
• Pipeline Management: Ensure a steady influx of new business and nurture existing client relationships.
• Thought Leadership: Position your business as an industry authority to build trust and demonstrate expertise.
Operations: How We Conduct Business
• Process Efficiency: Streamline operations and ensure all team members understand the company’s goals and values.
• Waste Minimisation: Assess and enhance the efficiency of your deliverables to reduce waste.
• Client Retention: Strengthen contracts and focus on long-term client relationships.
• Productisation: What is the demand for your product/services and how agile are you, if the market demands it.
• Proactive Planning: Implement 90-day goal-setting cycles to identify challenges and plan ahead.
Financial Management: How We Handle Finances
• Debt Control: Stay on top of bad debts and implement effective invoicing and collection processes.
• Profitability Analysis: Identify your best-selling and most profitable products or services.
• Financial Buffer: Establish reserves to safeguard against adverse conditions.
• Pricing Strategy: Adjust service costs in line with inflation and rising business expenses.
People: The Glue That Binds It All Together
• Delegation: Share decision-making responsibilities with trusted team members who align with your vision.
• Clear Accountability: Define roles and responsibilities to foster a culture of accountability.
• Talent Development: Invest in your team’s growth to enhance their skills and career progression within your organisation.
• Flexible Resourcing: Utilise freelancers and contractors when it makes commercial sense.
By embracing these best practices, businesses can enhance their resilience. Research indicates that SMEs implementing adaptive strategies, such as embracing digital transformation and flexible work arrangements, are better positioned to withstand economic downturns.
Seize the Opportunity
While the economic landscape presents challenges, it also offers opportunities for those prepared to adapt and strengthen their foundations. By focusing on these core pillars, your business cannot only navigate the current environment but emerge stronger as conditions.
Research indicates that approximately 20% of new businesses fail within their first year, and about 50% fail within the first five years. However, businesses that implement robust best practices, such as strategic planning, efficient operations, sound financial management, and strong leadership, significantly increase their chances of long-term success. By focusing on these core pillars, companies can navigate challenging economic landscapes more effectively and enhance their resilience.
This underscores the importance of adopting comprehensive strategies to strengthen business foundations, thereby improving survival rates and positioning for growth.
For an Example of how to implement The Four Pillars of Business with the F.I.T Framework
