As a business owner, the thought of selling your company can be quite daunting. You’ve poured your heart and soul into building it, and it’s crucial the company continues to grow even after your departure. An attractive option is selling your business to your employees, those who know your business inside and out and have a vested interest in its success.
The upside of employee acquisition
Selling your business to your employees provides a seamless transition with minimal disruption. Employees already understand how the company operates and have established relationships with clients, suppliers, and investors. The transition is usually smooth, as there’s no need for extensive training or introduction to a new owner.
Moreover, selling to an employee often means less hassle, saving you the time and effort required to bring an external buyer up to speed. You might also not need to stick around for as long as you would if you sold to someone outside the business, as the new owner won’t need as much training.
The downside of employee acquisition
Though selling to an employee can seem ideal, it does come with potential drawbacks. The sale price might be lower than what you might get on the open market, and there’s a possibility that the employee doesn’t have enough capital to seal the deal, meaning you might have to help fund the purchase.
The selling process
Selling to an employee generally follows a common path, involving various steps including agreeing on a sale price, having the business evaluated, establishing whether the employees can buy your business outright or if you need to finance part of the deal, and drafting a shareholder agreement to transfer ownership. It’s crucial to have each stage overseen by professionals to ensure everything is done correctly and legally.
The Employee Stock Ownership Plan (ESOP) option
Consider an Employee Stock Ownership Plan (ESOP) whereby you sell the business to all qualified employees instead of a single buyer. ESOPs can either be funded by the employees, or more commonly, by the seller. In either case, ownership of the company transfers to the employees, and you receive the sale price plus interest.
Preparing your employee for leadership
Once all the paperwork is complete, it’s time to start the transition process. The duration will depend on the level of experience and knowledge your employee possesses. If you’ve been mentoring them for an extended period, the transition will be smoother.
Conclusion
Selling your business to an employee is a viable way to ensure it continues to operate successfully. While you may not get the same price as selling on the open market, the advantages of a smooth transition and the knowledge that your business is in trusted hands often outweigh the potential financial differential.
Contact us for some independent advice on this option.
Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.
Most small businesses experience cash flow problems from time to time and urgently need working capital. Many business owners immediately think of the bank or loans when they’re short of money. But there are other resources you can tap before you ask for that expensive overdraft or overdraft extension. The money you need might already be there—locked up in inventory, assets or your debtors’ book.
You can often free up funds from within your business by re-examining your business systems, and these funds might in themselves be sufficient for your immediate needs.
Good management
Even if the funds you free up from within your business are not sufficient, there is another payoff: the effort you make in searching for them helps to ensure that you are running your business in an efficient manner.
To free up funds from within your business, look closely at:
assets
customers
suppliers
Assets
Your assets include debtors, stock, pre-paid expenses, vehicles, plant and equipment, fittings and property. Each of these is a possible source of funds.
Debtors
Are you letting some customers have the free use of your money for months? This is a common occurrence in small businesses where the owner(s) are so busy getting the business off the ground, products out the door, or services completed, that they don’t pay enough attention to basic business procedures. Many customers will take advantage of this ‘free money’. But your business is not to serve as a free bank.
Here’s how you fix the problem:
Get invoices out promptly. Whatever else you do, become efficient at getting invoices out early. This is your future cash flow—the lifeblood of your business! You want to receive it as soon as possible. Start this new system NOW. Depending on your business, you can often cut out statements simply by printing at the bottom of the invoice: ‘Please pay on this invoice as no statement will be sent.’
Send the invoice with the goods or immediately the service is completed. Date the invoice from no later than the day it is sent rather than following the standard ‘last day of the month’ date for invoices. The earlier the invoice date, the better your chances of getting paid earlier.
Change the terms for some of your customers, or for new customers. For example, can you reduce ask for immediate settlement or set reduced payment terms such as 7 days or 14 days from date of invoice?
Follow up promptly when invoices aren’t paid by due date. This is critical. Be polite but firm. If you haven’t the time to do this yourself, then appoint someone to do it for you.
Monitor your debtor collection days and set an improvement target each quarter. For example, can you find out the benchmark standard for your industry? IF the average in your industry is 30 days, but you are taking an average of 45 days to collect outstanding debts, then there’s clearly room for improvement. If your customers or clients have been taking advantage of you because of your previous laxity in invoicing, then you may need to re-educate them. Do this politely so you don’t offend customers:
“Have you received our invoice, Peter? I’m just checking that you’re happy with the goods/services we provided? “We’ve got a new invoicing system going here, because we’ve been a bit lax in the past. My accountant has set some tough goals for me to meet in reducing our average debt collection cycle, so if you could settle that invoice promptly I’d be most obliged.”
Consider factoring. This simply means selling your outstanding invoices to a finance company. So instead of having to wait 30 days or more until an invoice is paid, you receive most of your money upfront from the finance company that then in turn collects the money from your customer. The finance company will of course charge you a commission for this service. Be aware, though, that there are pros and cons to factoring. For example, check that the finance company will not antagonise your customers with a heavy-handed approach. Talk to them first about their collection methods.
Consider offering a discount for prompt payment. If you’re going to pay a fee for factoring, why not try offering a discount to your customers instead? Discounts are not a good option for low-margin businesses, but can be an option for high-margin operations. You have to work out whether the use of money gained earlier is worth the discount you’re offering. NEVER give the discount if the person has missed the due date for the discount offer. (Yes, some will try this on.)
Inventory
Do you have excessive capital tied up in stock? This can occur in two ways:
carrying high levels of items that you could obtain from suppliers at short notice
having too many slow-moving items (and too few fast-moving items).
A quick sale?
Review regularly your stock levels, your stock turnover rates and your purchasing policies. Can you free up money by reducing stock? What about moving out of the slower-moving lines or having a quick sale of dust-collecting stock? It might pay you to reduce some items quite heavily to get some money in quickly.
Can you approach suppliers to take back any excessive stock you may have ordered? They might help you out of a temporary tight corner as a goodwill gesture if you explain you have a temporary cash flow crisis, but that you do wish to build a long-term relationship with them.
If you need additional funds to purchase more stock, make sure that you’re replacing slow-moving stock with the faster selling lines.
Pre-paid expenses
This is another area you could look at. These pre-paid expenses often relate to services. For example, you might pay your insurance bill for the year all in one hit, but you could arrange to pay small monthly amounts. There might be an additional cost for doing this, but you must weight the extra cost against the advantages of 12 small payments which your cash flow can comfortably handle versus one large annual payment. Try a similar approach with your accountant. Instead of facing a substantial bill once a year, ask if you can pay a set amount monthly.
Assets
Assets can drain significant amounts of cash out of a business. Do you really put all your assets to full use? You might be able to:
Sell off little-used assets and hire suitable replacements when you require them.
Lease or rent assets and equipment that depreciates rapidly such as computers and or vehicles
Customers
Don’t forget your customers can be a source of business funds. Apart from debt collection improvements already discussed, try these tactics:
Here’s a ‘thinking outside the square’ tactic. Ask some of your credit customers (start with the ones you know best) if they would be willing to use their bank credit cards for purchases from you, instead of using the account facility they have with you. For example, if they purchase say $2,500 worth of goods or services from you, they would pay for this by means of a business credit card. They still get 30 to 55 days credit before having to pay the credit card company, but you get your cash as soon as you sent in the voucher to the bank. You have to pay the (around) 5% commission, but otherwise it’s almost as good as a cash transaction.
If you’re starting a new business, consider establishing it on a cash only basis to keep the funds inside your business rather than locked up in Accounts Receivable.
Ask for progress payments
If you supply goods over a period of time, or if you’re a service business, ask if you can invoice for progress payments. This is quite a common method of ensuring you get some cash flow during a project instead of waiting until the end of a project or delivery period to invoice—and then still waiting at least another 30 days for payment.
There’s another benefit here too. If the customer turns out to be dodgy, you’ll discover this quite early on instead of at the end and you can cut your losses before they mount up and perhaps drag your business down. This tactic is therefore very suitable for tradespeople subcontracting to a developer.
Suppliers
Finally, consider your suppliers as a possible source of funds. Ask for extended payment terms to give you the opportunity to sell the goods first before you have to pay. If the supplier won’t budge, try this tactic: split the order in two and offer to pay normal credit terms (30 days) on the one half of the order and 90 days on the other half. Your suppliers will be more likely to agree to this kind of arrangement if you’ve paid them promptly in the past. After all, they have a vested interest in helping you succeed.
Quantity breaks – incentivise customers to order more through quantity discounts.
Re-order levels – Setup minimum stock levels to avoid stock outages on important lines.
Default reorder quantity – Setup re-order quantities so the most economic order quantity is placed.
Receive Stock – Receive items into stock so you can sell them before receiving the final bill
Take advantage of discounts
Pay accounts that give discounts on time. This is an easy one. If any suppliers offer a discount for early payment, then take it (and there is no harm in asking for a discount).
These are just suggestions and may not be suitable for your business. Feel free to contact us about ways to find money in your business.
Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.
The words ‘personal brand’ are still somewhat controversial, and carry an unfortunate cast of self-promotion and vanity. The truth is that personal branding is more important than ever in the job market, and those without a clear personal brand or mission to create one are lagging behind the competition.
What is a personal brand?
How you present yourself has always been important in the workplace. In the corporate heyday, it was established that to get a good job and be considered for promotion, you had to dress, speak and act appropriately for the company with which you were employed. Consider this the forerunner of the personal brand; now you simply are creating an impression of yourself that companies want to hire.
Though companies are growing ever larger, there is more competition for fewer jobs; yet rarely does someone stay in a job for more than a few years. This makes it vital to ensure you always look employable to other companies and remain visible within your own organization. You must update your personal brand and create an image of yourself which showcases not only your proficiency in your current job, but your transferable skills and achievements.
Personality versus personal brand
Do not mistake your personality for what constitutes an attractive personal brand. In the age of social media, everyone is Googling prospective employees and personal information is available at their fingertips. If there are unattractive photographs of you on Facebook, personal details about your family, or complaints about your work, delete them or make them private. Now would be a good time to set up work-only accounts and separate your social and corporate friends lists.
Promote yourself professionally on the Internet. When creating a profile or website, what photographs are you using? What typefaces and colors do you use? What are you saying? The handwriting font may appeal to you, your favorite color may be baby pink or that picture of you wearing a Halloween costume may show your best side, but ask yourself: would you hire you based on your personal tastes?
Remember, this is not about changing who you are, but highlighting your best assets.
Present yourself in your best light
First, determine what brand you wish to project. Are you an excellent communicator, or highly organized? Highlight successes in these areas and build your reputation by constantly seeking tasks in your workplace that allow you to demonstrate these skills. If you’re not so good at time management, or do not work in a team well, work on these valuable skills or convert them to assets by saying you “use a spontaneous approach to problem solving” or “are independently motivated.”
Curate a professional image
Now that you have decided how you will present yourself, translate that into the nuts and bolts of branding. Give your website a makeover, overhaul your social media accounts and even change the way you dress in the workplace. Even small changes like using a different font for emails can present a radically different version of you. Refresh your CV, and focus on the skills you want to use to advance your career.
Remember that branding is just another word for marketing. You are selling yourself in the workplace every day by making yourself available and preferable for different responsibilities. Do not be afraid to ask for others’ input. Ask managers why they chose you for certain tasks, or ask your co-workers what word jumps into their minds when they hear your name. Reliability? Professionalism? Authority? Or is it something negative? Ask for honesty, and receive criticism with grace.
You can use personal branding to advance in your current workplace, look for a similar job elsewhere or instigate a complete career change. If you have been working as an office temp and would rather work for a start-up selling ethical cosmetics or alternative clothing, consider your personal brand.
Communicate the hard skills you learned in your office and do not be afraid to incorporate your hobbies and volunteering experience; if it is relevant to the job you wish to acquire, your personal brand should reflect it. Bold, illustrated CVs and outspoken opinions on social media have their place if they align with the company’s image and goals.
Personal branding is a powerful tool – you can use it to your advantage or to your detriment. Use it wisely, and it might be the most important thing you ever did for your career.
Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.
If you have been lucky enough to encounter generous people, you understand that they have a truly unique gift for garnering the respect and admiration of individuals around them. When you are a leader, having a positive relationship with the people who follow you is a huge asset that you simply cannot put a price on. If you are looking for ways to become a better leader, increasing your generosity can improve your effectiveness and contentment. Here are a few things you can begin doing to increase your generosity.
Fully understand the benefits of being a generous person
Being generous because you know it is the right thing to do and being generous because it is something you value are two different things. If you want your generosity to be effective it is important that it comes from a place of sincere care and concern for those you are leading. Being generous to others not only lowers their anxiety and increases their appreciation for you, it also adds to your personal happiness and health.
Look for moments to be grateful
Being grateful could be as simple as sending out a brief and personal thank you email when the occasion arises. You do not need to create a large display or spend a lot of money to make people feel valued. Simply watch for positive behavior in others and when you see it, make a mental note to acknowledge it and express your gratitude.
Find opportunities to give back to your community
Depending on your resources and the capacity in which you are leading others, the extent of your reach may vary, but don’t let that stop you from finding ways to give back to your community. Most homeless shelters have standing requests for donations of socks, bottled water, coats and blankets. Speak to your company to gauge their interest and help to organize a supply drive or fundraiser to give back to your community. When the people you lead see you being generous, it puts your character on display and often increases the level of respect they have for you.
Become more optimistic and hopeful
Naturally generous people are often idealists. They have a perception of how the world around them should be and they believe in the goodness of people. If you are naturally pessimistic, becoming an optimist could be a struggle for you, but it is not insurmountable. Next time a challenge arises on the team you are leading, go above and beyond to believe the best in others and trust that the outcome will be positive even when it may not look that way on the surface.
Look for opportunities to trust others
Trusting others may not seem like a quality of a generous person, however, one of the greatest ways you can be generous with others is by trusting them enough to allow them to take the lead on things that matter to them. Trust their ideas and more importantly, their ability to complete the task at hand. When you loosen your grip as a leader and trust the people around you to do what needs to be done, they will in turn see you as a more trustworthy, generous leader.
There are many ways you can express your generosity towards others. When you look for opportunities to be more understanding and helpful, the people you lead will become more secure following you. It is important to gain trust and respect when you are a leader and one of the best ways to do that is by being generous as often as possible!
Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.
As a business owner, you know that the right people are crucial to your company’s success. The best employees can help you achieve your business goals, improve your productivity, and drive growth. But finding the people best suited to your team can be daunting, and sometimes it’s easy to hire someone who seems okay, rather than taking the time to find the best fit.
Here are some steps you can take to find and hire staff that support your business growth.
Step 1: Define the job and necessary qualifications
The first step in finding the right talent is to accurately define the job description and qualifications. Is this a new position you’re hiring for? Are there gaps in employee skills that need to be met? Is this a position that requires specific knowledge and experience?
Remember that there’s a difference between “must have” qualifications and “nice to have” considerations. When setting out “must have” qualifications, include only those that are absolutely necessary to the person successfully performing the role.
Keep in mind also that the job salary should match the role and the qualifications. You can’t expect to hire someone with 10 years of experience by only offering an entry-level wage.
Step 2: Use multiple recruiting channels
These days, there are many places you can turn to when finding employees, and each attracts different people. Using a variety of channels when searching for employees gives you a higher chance of success.
Post the job description on your company website and multiple social media platforms. Use job boards and recruitment agencies to expand your reach. Reach out to your personal and professional networks to ask for referrals or recommendations. After all, the people you know also know people. They may be able to recommend someone who’s a great fit for your business.
Step 3: Screen candidates
Once you have a list of candidates, you’ll need to screen them. This includes going through resumes/CVs and conducting interviews. Check to make sure they have the qualifications and experience you need.
During the interview, ask open-ended questions to assess the candidate’s problem-solving abilities, communication skills, and overall fit. Ask about the results they’ve obtained in previous jobs, and lessons they’ve learned throughout their experience. It’s also important to give candidates a chance to ask questions about your company and the position you’re hiring for.
Step 4: Check references
Before making a job offer, it’s important to check references. Contact former supervisors and colleagues to ask about their work performance and attitude. Double check that they obtained the results they said they did. This will help you ensure that the candidate has a proven track record of success and is a good fit for your company.
Step 5: Make a job offer
After checking references and confirming the candidate has the skills and qualifications to match your needs, it’s time to make the job offer. Be clear about the terms of employment, including salary, benefits, and start date. Give the candidate time to review the offer and ask any additional questions they may have.
Once they accept the offer, you can begin the onboarding process.
Step 6: Provide training and support
Once you’ve hired someone, it’s important to provide training and support to help them succeed in their new role. This can include job-specific training, as well as coaching on company culture and values. Regular check-ins and feedback can also help new employees feel supported and valued, and make sure any issues are handled quickly and effectively.
Final thoughts
Finding the right talent for your business can be challenging, but you can increase your chances of finding the right people who will help your business grow. Remember to be clear about job expectations, use multiple recruiting channels, screen candidates thoroughly, conduct in-person interviews, check references, make a job offer, and provide training and support.
Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.
As a small business owner it’s hard to juggle your work and outside responsibilities. It’s important to run your business effectively and still have a life outside the office.
You need a good balance between work and play for your health and well-being. Small business owners often fall into the trap of working too hard, ending up exhausted from the constant work demands associated with self-employment.
Why you need balance
Working too much without taking time out for yourself and your family can quickly become counterproductive. You’ll be tired, stressed and irritable, leaving you unable to perform optimally. As a result, you’ll be more likely to make mistakes and snap at people who are important to you and your business.
Some dangers of overworking include:
Missing opportunities because you’re too busy
Being short-tempered with your staff, affecting their attitude and performance
Treating your family poorly, resulting in an uncomfortable home life
Working to the point of burn out or illness
Losing the passion that prompted you to start your business.
Avoid burn out
There are a number of things you can do to scale down your workload and regain a sense of balance.
Start delegating
Delegating will take some of the pressure off you and free up time for more urgent and important tasks, allowing you some leisure time to relax.
Create good systems
Develop a clear operations manual for each process in your business. This lets you and key staff take a break, and speeds up training when someone new comes into the business.
Stretch and walk
Take a few minutes every so often to get up from your desk and stretch. It’s good for your body and will help you stay focused.
Talk to your family
Ask for suggestions and input – they’ll see things that you can’t.
Network with other business owners
Chat to fellow business owners who seem to be working normal hours. You’ll stop feeling so isolated and you might get some valuable advice.
Take mini-breaks
Put mini-breaks into your diary. Schedule a day off once a month, a week off every 12 weeks, or perhaps take every second Friday off.
Re-evaluate your client base
Do you have customers that take up far too much of your time for very little gain? Find a polite way to stop doing business with them or pass them on to staff members to deal with.
Stay motivated
Staying passionate about your business and motivated to do your best is important. If you find you just don’t have the energy you once had, your staff and business will suffer. Take action before you start to enter a negative spiral.
You could try the following:
Set exciting and challenging new goals.
Share your goals with your staff so everyone understands what you want to achieve.
Set measurable ‘stepping stones’ to the main goals and celebrate each achievement.
Refresh your daily routine. Allocate blocks in your diary for key daily activities, such as checking emails, meetings, and visiting clients.
By staying motivated and avoiding burn out you’ll have the foundations in place to enjoy running your business again, while also retaining a fulfilling life outside work.
Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.
The same advice for building a healthy investment portfolio applies to your business: diversifying will lower risk and increase growth.
Adding a recurring revenue stream (or two, or three!) can provide a predictable, ongoing source of income which will improve the accuracy of your projections, increase profits, and provide a buffer for any unexpected sales dips.
Here are four simple ways to start earning recurring revenue for your small business.
Auto-renew subscriptions
The most tried and true recurring revenue model? The subscription that automatically rolls over each month unless cancelled.
Think newspapers, magazines, Netflix, and those delightful subscription boxes that arrive each month featuring food items, craft kits, cosmetics, specialty teas, books, or clothing. Some B2B examples are cloud based accounting software, document storage, anti-virus protection, and web hosting.
Customers depend on their evergreen subscription services because they make their lives easier or more pleasant. As long as they feel they’re getting value for their money, your customers won’t give the small monthly fee charged to their credit card a second thought.
Tips for getting started: Research what your competitors are offering, and talk to your customers about the kinds of products and services they’d be happy to pay for on a monthly basis.
Membership sites
If you’re an expert in your field, a membership site can provide a lucrative opportunity to serve more clients on the web—and earn more income.
In addition to paid, password protected content, your membership site can offer your clients an online community portal, where they can socialize and connect with you for group mentoring outside your office hours.
Ideal for location-independent minded entrepreneurs, coaches and consultants, a membership site allows the freedom to serve clients all over the world.
Tips for getting started: If your website is built on WordPress there are a number of membership site plug ins available to let you accept secure credit card payments and provide member-only access to certain content.
Affiliate subscriptions
Unlike set monthly subscriptions, being an affiliate may offer a less predictable income stream, but, nonetheless, an opportunity to earn some passive income.
With the affiliate model, brand ambassadors are paid a set fee or percentage of each total sale for each successful referral. If you’ve built credibility and trust in your brand, some of your customers will likely be willing to pay for the products and services you recommend.
How to get started: Make a list of the businesses that you regularly buy from. Check each company’s website to learn how to become an affiliate. Once you’ve signed up, you’ll be sent a unique link to share with your customers. Every time a purchase is made using the link, you’ll earn a referral fee.
Final thoughts
To learn more about the benefits of setting up recurring revenue streams, take a look at John Warrillow’s, The Automatic Customer: Creating A Subscription Business in Any Industry.
In addition to increasing sales and profit margins, recurring revenue can lead to better customer retention as well as greater growth for your business.
Now that you know a bit about recurring revenue streams, which model is right for you?
Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.
As a small business owner, you know the importance of getting the word out about your company and engaging with customers. Social media platforms are indispensable tools for achieving this.
The following is a guide to help you leverage social media to increase your brand’s awareness, engage with customers, and generate leads.
Step 1: Define Your Goals
Before diving into the world of social media, it’s crucial to identify your business goals and understand how social media can help you achieve them. Some common objectives for small businesses include:
– Increasing brand awareness
– Building customer relationships and loyalty
– Generating leads and converting them into sales
Step 2: Choose the Right Platforms
While there are many popular social media platforms, not all may be suitable for your business. Choosing the best platforms for your business will depend on your target audience and the type of content you create.
Some of the most popular platforms include:
Facebook: Offers a wide reach and flexible options for engaging with customers.
Instagram: Ideal for visual content and targeting younger audiences.
TikTok: A hub for viral trends, music and educational content, TikTok is primarily focused on younger audiences. For business owners it offers a unique opportunity to connect with a global audience, boost brand awareness, and promote products or services in a fun and engaging way.
LinkedIn: The best platform for B2B marketing and professional networking.
Twitter: Great for real-time updates and sharing news about your business.
Pinterest: Excellent for businesses with visually appealing products, especially in the fields of fashion, home decor, and food.
Step 3: Develop Engaging Content
To make the most of social media, you need to create content that resonates with your audience. Here are some content ideas you can use to engage with users:
Share behind-the-scenes looks at your business operations or new product launches.
Post customer success stories and testimonials.
Share educational and informative content related to your industry.
Publish promotional content, such as limited-time offers, contests, and giveaways.
Step 4: Content Distribution Plan
Now that you have created engaging content, it’s time to decide how to distribute it across various channels. To do this:
Create a content calendar with a detailed timeline for posting on each platform.
Consider the optimal times to post on each platform for maximum engagement.
Consider using scheduling tools like Buffer or Hootsuite to automate the posting process.
Step 5: Measure Your Success
To ensure that your social media strategy is effective, it’s crucial to track key performance indicators (KPIs) over time. Tracking these KPIs will help you understand the effectiveness of your campaigns and make necessary adjustments:
Number of followers, likes, comments, and shares
Reach and impressions
Engagement rate
Click-through rate
Conversion rate (number of leads and sales generated).
Step 6: Align Content with your Brand Story
Lastly, make sure that all content pieces align with your company’s brand guidelines and convey a cohesive narrative that tells your brand’s story. This will help create a consistent brand image and reinforce your brand identity in the minds of your audience.
Small businesses can get a big boost by using social media to spread the word about their brand, connect with customers, and find new opportunities. Just follow these steps and you’ll be on your way to an awesome social media marketing plan for your small business.
Enjoy sharing!
Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.
It’s hard to go a day without reading something in the news about the state of the economy. Whether it’s interest rates rising or the cost of living, there’s no getting around the fact that in 2023 there are many doing it tougher than a few years ago. But while there are some economic challenges for individuals and businesses, it’s important to not go too far down the rabbit hole. Remember – economic conditions are forever changing, and one thing history tells us is that things can change at any point.
If you’re concerned about the economy’s impact on your business or have already experienced its effects, read on. In this article, we’ll explore ways to adapt and improve your business during slowdowns, so that when the market bounces back, your business can emerge stronger.
Take the time to really understand your market conditions
The news can often overwhelm us with negativity. While it’s crucial to stay informed, consuming every opinion piece and social media commentary can lead to a negative mindset. Instead, focus on your own business and industry to identify the real challenges you’re facing. Research might even uncover some opportunities too.
Consider the following:
Have there been changes in your industry or customer behaviour?
Can you identify any new, untapped opportunities?
Are there any emerging trends that you can take advantage of?
Understanding your business’ position in the market and identifying opportunities to differentiate from competitors is crucial. It guides your marketing budget allocation and shapes your products/services.
A chance to improve for efficiency
If your business is experiencing a slowdown and you have some extra time, it’s a great opportunity to work on improving your business. Many business owners find it challenging to make improvement initiatives a priority over customer or administrative tasks, but now you can focus on executing those long-standing plans. These activities can make your operations more efficient, and this will be even more beneficial once things pick up again.
Documenting processes
Capturing your business processes is a valuable way to improve efficiency. Documenting procedures and creating visual aids can help onboard new team members faster and safeguard against knowledge loss. It’s essential to protect your business from the risk of key personnel leaving.
Automation
AI and automation are changing everything. Explore how these technologies are used in your industry to streamline tasks like data entry, reporting, and inventory management.
Update old systems
Migrating from one system to another can be complex and time-consuming. Businesses often stick with legacy systems for longer than necessary. But new tools can speed up daily tasks, benefitting long-term business growth. These new tools are good for business long term.
Exploring different revenue streams
Consider exploring additional offerings if there is a decline in demand for your core services or products.
Service related businesses
Consider your team’s existing knowledge. Can you broaden your work to capture more customers? For example, if you’re a builder who completes new builds, think about how you can communicate your skills for property maintenance, custom carpentry, outdoor living spaces, or project consulting. Your skills and industry knowledge can be used in various ways – just take some time to think about it.
Product related businesses
Consider expanding your product offerings to include items that align with your brand and are cost-effective to source. This can help diversify your revenue streams, keep your brand current, and provide marketing opportunities through email campaigns.
Nurture customer relationships
Focus on your existing loyal customers as a top priority, as their satisfaction is key to maintaining a successful business. While acquiring new customers is important, remember that the cost of acquiring them is often higher than retaining the ones you already have. In today’s digital age, providing great customer experiences is crucial, as online testimonials and recommendations greatly influence potential customers. Take advantage of any quiet periods to add spontaneous value to your loyal customers, whether it’s offering advice, checking in on their satisfaction, or surprising them with something free. Going the extra mile for your customers and thinking beyond transactions will earn you their trust and respect, resulting in positive word-of-mouth and referrals that can significantly impact your long-term success.
Expanding B2B opportunities
Consider if your business, focused on serving end users, could also extend its offering to cater to other businesses. This can provide a consistent revenue stream with less time and management compared to direct consumer engagements. Assess whether pricing for businesses could be lower than for consumers. Estimate potential revenue against reduced margin. If the numbers align, explore this opportunity while maintaining your core business.
Keep track of your finances and budget
Regularly reviewing your finances is crucial to improving your business’s health. During quieter periods, you have the opportunity to implement cost-saving practices that can have a lasting impact. For example, consider reviewing your suppliers for cheaper options to save time and money. Conducting a comprehensive expense review can unlock savings without significant disruption.
Understand natural business cycles
Keep calm and avoid making hasty decisions based on short-term events. While it can be difficult to ignore the constant commentary on the economy, it’s in your business’s best interest to rely on concrete facts and data when making decisions. Having a long-term business plan serves as a reference point for guiding your choices.
If you need help balancing short-term actions with long-term goals, reach out to our team for advice.
Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.
