One certain outcome of the referendum is uncertainty. The future of stock markets, currency markets, political parties and policy, trading regulations, residency status and employment laws are now all unclear. With change and uncertainty comes upset. There may be upset at a personal level as business owners or amongst our employees, suppliers and customers.
As business owners we will be required to lead a way through this period and probably the most important fundamental step is to deal with any emotional impact of the changes quickly and powerfully. Panic or despair can be a self-fulfilling prophesy. Our job is to provide the vision and pathway for a positive future for our business.
Given that making money in business is about taking a risk and managing risk, it has to be acknowledged that the uncertainty has added risk to our businesses. This is probably why most business leaders and associations lobbied for Remain. With the future unclear, it is not likely to be a great time to making investments. This is not a blanket statement because each business and investment opportunity is different and needs to be considered on its merits. However putting a lot of cash at risk at this point has added dangers given the unknown surrounding so many aspects of the business landscape.
That said change and uncertainty also brings opportunities and we need to be alert to these opportunities as they arise, refocusing what we offer on what consumers now need.
The sum total of these investment decisions by businesses and consumers is very likely to be a coming recession. Most economists agree that this is now inevitable. UK growth forecast for 2016 has already been reduced from 2% to 0.2% and George Osborne has made clear indications that he thinks there will be the need for further spending cuts and tax rises.
As business owners we now need to focus on what strategies give a business the best chance to weather a recession. It is important to underline that this is not about being gloomy, this is about being forewarned and taking positive action ahead of the competition.
- Managing cash is important at any time but particularly in a recession. At this point we should be looking to maximise cash reserves.
- Review your product range, pricing, positioning in the market (your offering), ultimately the business with the best offering to the market will outperform their rivals.
- Review you cash-flow forecasts, if you already have tight cash-flow make contingency plans for a down-turn.
- Tighten up credit control and discounting. Do not allow sales on credit to run away from you, avoid discounting.
- Reduce overheads and inventory wherever possible.
- Renegotiate finance debt and repayments.
- Implement time saving improvements and processes.
- Track your numbers to help you identify what is most profitable.
- Lobby your local politician and business association. A huge amount is now up for discussion at national policy level, it is important that small business view point is heard.
- Review marketing to make sure you are investing in the most productive marketing tactics.
- Review personal finances. In hard times we may not be able to rely on the same income from our businesses. Where possible cut costs, refinance debt, invest in anything that will save you money.
- Carefully review any upcoming decisions about moving home. Property prices may fall resulting in negative equity.