The business landscape in the UK is a volatile one at the moment.
The country faces a long-term recession that threatens profitability across industries. It is true that recessive periods are particularly dangerous for businesses, as falling profits often precipitate internal collapse. But it remains the case that common and widespread struggles are often the cause for business downfall; what are they, and how can they be mitigated?
Finding Clients
The biggest and most obvious struggle facing the average business is that of finding and keeping clients. New businesses find this particularly hard, as they grow and expand in a market already occupied by established businesses and brands.
The trick to finding new clients is not to undercut the competition – which can serve to undermine your business and the wider industry, rather than increase your own client portfolio. Instead, it is to identify your business’ unique selling points and drill them into consumers’ minds with effective marketing strategies.
Hiring
Not only can it be hard to build a robust and sustainable client base, but it can also be incredibly difficult to find – and retain – talented workers. This is something that has become particularly difficult for businesses in recent years, as the working population has become better advocates for their own needs and worth; in the aftermath of the coronavirus pandemic, UK workers were found to be increasingly resigning from work, whether due to burnout or in search of better opportunities.
It should be clarified that this is a net positive for workers in the UK and for employment in general, as talented workers more equitably seek roles that suit their needs and productivity rises in concert. However, this new age of worker agency requires employers to do everything they can to win over talented staff. Not only should the role be adequately compensated, but perks should outclass competitors.
There is also something to be said about the infrastructure available to staff on arrival in a new position. If your business’ tools and provisions are not adequate, and workers feel themselves fighting an uphill battle as a result, staff churn will increase. By embracing new technologies and digitising services, you can make life easier for staff. A digitised HR system would enable staff to access resources more easily, as well as undertake administrative processes without unnecessarily wasting man-hours.
Financial Planning
Often, seemingly successful businesses will be undermined and ultimately shuttered as a result of their financial management. Profits alone are not a metric by which to measure success – and, indeed, chasing profits with little regard for other metrics can be the cause of a business’ downfall.
One of the most important metrics to track is that of cashflow – or, the money entering and exiting your business. Your profits can be high, but your cashflow can be negative, if for example you are paying off debts with your income. Managing cashflow is the first step to conscious and effective financial management.