It’s no secret that small and medium enterprises (SMEs) have had more than their share of tribulations recently – Brexit, Covid, and now soaring interest rates and energy costs.
But whilst you may be feeling shell-shocked, now is not the time for desperation - it’s the time for preparation.
If you ready your business for the tricky times ahead, you might even turn adversity into opportunity.
Review, replan, rebound
Reviewing the business plan is critical to identifying coming external impacts, how they might affect you, and what action to take.
It’s worth remembering that, even in a downturn, this is about identifying upside, too. (Take the recent mini-budget, for example, which – infighting and U-turns aside – actually delivers significant financial benefit for many SMEs).
Work with a trusted advisor, and plan for how your business would respond to different levels of increase and decrease of both revenues and costs.
Cut costs, keep lifelines
Shedding costs in difficult conditions is a no-brainer, but whilst products, services, people, and processes can show room for rationalisation, it’s often marketing (brand and promotion) spend that gets cut – and this is a mistake.
Difficult trading conditions are precisely when businesses need marketing most - not least because share of voice in a downturn tends to translate into share of market after it.
Keep calm, and market on.
Cash in
Cash is king for SMEs, so getting it into your coffers quickly is paramount. Payment methods and terms are key, here.
Card payments are now cheaper and more accessible for SMEs than ever before. They enable customers to pay quicker, spend more than they actually have (on credit cards), and are indispensable for online sales.
There are also opportunities for you to “upfront” payments using subscription models, via direct debit, standing order, and (again) cards, all of which facilitate cash flow.
Bad payers kill cashflow, so make sure you’re connected to credit controllers and debt collectors (these can often be commissioned through your accountant) to accelerate late payment.
Also, shorten your payment terms where possible.
Communicate strongly
In a downturn, communicate regularly and compellingly with suppliers, customers, and prospects, to show activity, growth, positive news, and resilience.
Gaining readers, followers, and listeners will help you build relationships, get the message out that it is “business as usual”, and calm the rumour mill (which goes into overdrive in a downturn if you clam up).
Networking, email campaigns, social media activity, digital product or service promotions, and marketing partnerships with complementary businesses are all key to maintaining credible and memorable communications through difficult times.
Network, innovate, diversify
Change can be painful when tackled alone, so building a network of contacts, like-minded individuals, advisors, and peers is core to finding the inspiration, resources, and opportunities to evolve and reshape your business.
This can mean, for example, finding different energy suppliers to reduce costs, or identifying outsourced providers to enhance efficiency and productivity.
It can mean consulting subject matter experts on pricing, market research and segmentation, and product and service proposition, to focus on and fund innovation.
It can mean making contact with revenue stream partners to cross-promote your products and theirs, empowering diversification.
In fact, it can mean all the hidden good in an uncertain climate.
As the song goes, “accentuate the positives” – but the tune sounds much sweeter when you have access to the right people, expertise, resources, tools, and support.
For more information on how we at the Bedfordshire Chamber of Commerce can connect you to help and support enabling you to bounce back stronger in trying times, please visit www.chamber-business.com, or call us on (01582) 522448.
