According to a new survey released by business advisers BDO, concerns about global economic growth has dramatically affected UK business confidence. This report suggests that many businesses may be unlikely to invest in the next few months, which could have a negative impact on the UK economy in the future.
Recently, concerns about the global economy have been coming in thick and fast. Two of the biggest organisations that have publicly made financial crisis claims are The Guardian and The International Monetary Fund.
In Larry Elliott’s latest article in The Guardian he said: “2016 will be a year of living dangerously for the global economy.” He believes that in the future (2017 and beyond) we will experience another huge financial crisis.
This prediction was also supported by the International Monetary Fund who recently used its Global Financial Stability Report to highlight their prediction that the next financial crisis is on its way.
Why has there been such a drop in business confidence?
Many have claimed that Britain’s economic recovery is cooling down and losing momentum. Larry Elliott suggests that rising personal debt and weak income growth has a part to play.
One thing that is for sure is that across the country, household spending has decreased because more and more people are worried about the economic recovery on a global scale.
These doubts about the economy are raising concerns and questions in business. Decision makers across the country are currently discussing investment plans and asking whether now is the right time to spend money on investment, or whether they should instead be looking at ways the business can cut back.
But, a decline in business investments would cause the UK economy to further slip, which will cause more worry for businesses further down the line.
So, what can businesses do to beat the economic slump?
Refuse to Give Up
Well firstly, the best thing to do is ‘something’. The only way to improve the UK economy is by boosting productivity and there are a huge number of ways that businesses can do this. Businesses that choose to do ‘nothing’ are not only not helping the economy, but they also risk losing their competitive edge.
In times of economic worry, businesses must realign their objectives with the current economic realities. After all, the main aim of a business is to survive. So, whether you chose to renew your focus on your core customers or chose to reduce your operating expenses, it is important to always remember that survival is key.
Focus on Growth
After survival, the second thing businesses should focus on is growth.
Forward thinking businesses understand that in economic uncertainty, there are many opportunities out there that will help them gain a bigger slice of the pie. This can be done by something as simple as making the decision to invest in PR, SEO or digital marketing.
Marketing & PR
By getting more attention for your business and by increasing brand awareness, businesses may be able to take customers away from their competitors.
Offer Something New
Another relatively simple way to attract new customers is by simply being willing to adapt and make changes. By offering new products or a new way of doing business, businesses could entice new customers by introducing them to a never before seen product, service or operating process.
Following on from offering new products or services, businesses could also negotiate new or better contracts with their own suppliers. To succeed in business, you need to have a ruthless streak. So it may seem harsh to compare your current supplier with their biggest competitor, but your business comes first. By continually analysing your suppliers, their policies, their competitors and their prices, you can be sure you are getting the most out of them for the best possible rates.
As mentioned above, businesses could realign their objectives and chose to focus on their core customers. By reviewing purchasing history, you can find a vast range of interesting information or stats about your existing customers buying habits. You can then use this information to offer discounts or personalised recommendations which could help encourage customer loyalty.
Another area that you should continue to invest in (and if possible, increase your spend) is advertising. When businesses make the decision to cut costs, advertising is often one of the first victims. But, for those businesses that chose to continue with their advertising efforts, they gain greater exposure for the same price. This is because there is far less advertising ‘noise’ or ‘traffic’ that a business has to compete with.
Finally, businesses should never underestimate how important customer service is. Despite all of the technology out there, customer contact is vital. Great customer interaction, going the extra mile and providing responses in a timely manner are three of the key ways to better service your clients.
In fact, something as simple as offering same day deliveries could attract a whole new audience to your business. Over the years, customer expectation has changed and customers are no longer loyal to one brand. Instead, people pick who they do business with based on price and customer experience. This means that businesses must do all they can to keep their competitive edge.
For online retailers, delivery has a huge part to play in providing excellent customer service. For those stores that don’t offer a comprehensive range of delivery options, they will lose customers to competitor sites
Many businesses out there are disillusioned, they think cost cutting and putting a stop to all investment plans is the best way to protect themselves in economic uncertainty, but we hope this article has helped more businesses understand why this couldn’t be further from the truth.