Small business owners have never experienced such challenging times as those of the last year, with the recession, the emergency Budget and now the Spending Review.
And as the possibility of a double-dip recession still remains, coupled with cuts enforced by the government, the small business world needs to become accustomed to a new age of austerity.
If you want your business to continue to grow and compete, you need to face up to these challenges and adapt you mindset and your approach.
Here are some key areas to ask yourself and to really challenge your outlook:
Are you able to seek out the opportunity even in a seemingly negative situation? Your entrepreneurial spirit should lend itself well to an optimistic outlook, seeking out chances, relishing challenges and playing to your strengths……but are those around you optimistic? You need to be ruthless and ensure you only surround yourself by those with an optimistic outlook.
Your staff are key to delivering increased profits and helping to navigate your business successfully through difficult times. It is important to avoid showing indecision or apprehension as this will filter down into your business. Even when facing challenges, successful business owners are open and honest with their employees, which promotes a much better working environment than trying to cover up a difficult situation. So think about what information you can share with your staff today?
It’s never been more important to have clean, reliable and up-to-date data to analyse. Interpreting and watching the numbers needs to become a way of life, if it’s not already. Revisit your business model and question every element of your business, from your suppliers to your marketing and your sales process. Make sure the dashboard which drives your business is still relevant and if not, take the time to redesign it.
And most importantly, don’t sink into a state of denial! Although it can be easy to hide away and carry on as normal, those businesses that will succeed are the ones who are quickest to re-adjust and pick themselves back up.
There are no magic answers to increasing your profit during these difficult times, but something we’ve discussed recently at Wow is to focus on the basics:
Setting the right pricing is crucial and is the most important factor to impact upon profitability. You need to understand your pricing in relation to your competition and make sure your pricing reflects true value for your customers.
Cut people before you cut training and do it at the right time. Invest in staff who are eager to learn and progress and don’t be afraid to make changes. If you do make cuts, make sure you spend time rebuilding the team and reassuring the staff you keep. It is a mistake to stop investing in your customers and to completely stop your marketing effort. That’s not to say you can’t re-evaluate your marketing spend and be smarter with your budget.
So the overall message is that yes we are facing difficult times, but on the positive side we’re being pushed away from complacency and towards a smarter and more focused way of working.
Find out what a Wow accountant could do for you.