Five steps on how to manage your business in times of political turbulence
The past two years will be remembered as two of the most politically turbulent years in a generation. So what can we expect short term and what preparations should you make to keep your business on track and growing?
With the general election result being a hung parliament, this is causing further turmoil, plus we have all the personal views and opinions fanned by the social media circus, resulting in vast amounts of noisy rhetoric adding to the uncertainty. And before anything fundamentally material has been communicated, implemented or changed by the proposed new government.
Looking forward any UK GDP growth during 2017 will very much depend on the strength and speed of communication of the above outcomes and also when and how we push forward with BREXIT negotiations.
Unfortunately, consumers and our customers need a clear vision to instil a sense of purpose and the confidence to invest and procure our products and services. Prolonged consumer and business uncertainty will continue to cause volatile currency exchange rates, fluctuating world stock markets and commodity prices.
So what can you do to support your business and its growth, in this time of political turbulence?
1. Step back and take an external view: “Cause & Effect”
If you haven’t done so already, ensure you take some time to fully understand how these events effect your customers, their customer’s the net effect on sales and also your own business costs base. Also worth reviewing the potential impact on your personal situation such as salary, dividends, pensions and investments to understand the threats and opportunities.
Purchase of big ticket items may well be further delayed. Recruitment plans within larger organisations will be stalled. Imported products, oil based products and raw material prices are 10 - 12% higher than 6 months ago and may continue to creep up. If concerned or you envisage a risk to your business, please seek professional advice and don’t do anything radical unless you are professionally advised to. I would also advise that you get more than one professional opinion.
2. Don’t just focus on the negatives as there will be positives too
Sit down with your key employees and managers and share any potential implications that may affect your business. Not every business sector will be negatively affected. If the pound continues to slip lower against the world’s main currencies, this will continue to encourage tourists to come to the UK as it’s cheaper and a great opportunity for them.
Therefore if you are linked to the tourism industry or in the supply chain you may well benefit in the short term. Also note the UK population will find it at least 12% dearer to go abroad on holiday than stay in the UK this year, a double boost to tourism particularly across Cumbria.
If you export UK produced products or services currency exchange rates will help add to your competitive advantage too. Plus we will continue to see overseas company’s attraction to investing in UK property, infrastructure, luxury goods, stocks and purchasing or merging with UK based businesses.
3. Draw up 3 potential scenarios
Base these on low, medium and high risks outcomes and create action plans and review at least fortnightly. Agree the critical trigger points to implement appropriate actions when necessary.
4. Consistently communicate
Be positive and support your staff. Hold staff meetings, tool box talks, 1-2-1s, set up Q&A forum. Employees could be concerned that their jobs may be at risk and particularly if you have any EU or overseas workers. By communicating with and engaging your staff, along with focusing on improved employee productivity and efficiency, you can still make a positive difference to your business bottom line performance even if sales are slow, flat or even decline during the remainder of 2017.
5. Stay close to your customers
Continue to keep in touch with those customers who have already ordered but not taken delivery. Reassure them and check if there are risks to cancellations. You may have to incur increased costs, resulting in reduced margins or have repricing conversations to pass on surcharges.
These are best to be started as soon as there is likely to be any impact. Again there may even be positive business and profitable opportunities, I recall one of my clients back in 2009 buying a lot of stock at reduced prices, so evaluate your marketplace and exploit opportunities if applicable.
Finally – Don’t stick your head in the sand! Ensure you continually analyse your business market drivers, listen to your customers and staff, measure performance then review any medium term business plans based on the above steps and continue to adapt accordingly.
Having Business Agility will be a key success factor over the next few years.
"The greatest danger in times of turbulence is not the turbulence itself, it is to act with yesterday’s logic" – Peter Drucker (1974)
If you are looking to review or grow your business even in these turbulent times, Business Doctors Cumbria offers an initial free business health check and, can help you to establish a clear vision, to start working on the steps to fulfil your aspirations.
For further information please contact Peter Fleming 0845 163 1490 or 07966 686112.