In March 2020, a cartoon published in a Canadian newspaper went viral on social media.
It showed a small city on an island. The speech bubble said: “Be sure to wash your hands and all will be well.”
Meanwhile in the background two huge waves were threatening to drown the naïve residents: One labelled “Covid 19” and an even larger one, labelled “recession.”
Three years later, the cartoonist’s vision has come true, at least in the business realm.
Since the pandemic, the business environment has been one of continual flux and uncertainty.
Inflation, interest rates, exchange rates, consumer confidence and behaviour, the availability of workers, the needs and working patterns of our employees – these have all been through a sea change.
Add into that a dizzying pace of technological innovation in certain industries, and it’s clear that for most businesses, the economic cards have been dramatically reshuffled.
Yet many business owners are in denial.
Again and again, I see companies delaying taking decisions, because they believe they can “hold out” until “things get back to normal” – by which they seem to mean, pre-Covid conditions.
They avoid spending money until “conditions calm down” or “become clear.”
And they are reluctant to make vital changes to their business model or operations, adopting a “wait and see” attitude.
There is no sign that anything will get back to “normal” any time soon. So why do people persist in believing it will?
One key factor, I believe, is that many business owners have only ever operated in favourable economic conditions. For around a decade before the pandemic, markets were buoyant, inflation was under control and interest rates were rock-bottom.
Many people came to believe that this was the natural way of things – hence, the current conditions are an aberration.
Those of us who ran businesses during the shock of 2008 – or who bought houses with high interest rates – know that this is simply not the case. That golden decade of economic stability was delightful, but it was not “normal”. And now it’s had the stuffing knocked out of it.
That means you cannot keep your business in a holding pattern until conditions “calm down”.
On the contrary: For your business to thrive, you have to be nimble and adaptable, ready to take advantage of new opportunities as they arise and to take action to mitigate risks. You need to try new things, because the environment in which you’re operating has moved on. And you need to continue developing your business, or it will fall behind.
I know that it can feel uncomfortable to make decisions when there is no firm ground under your feet and when you simply have no idea what’s coming up next.
It takes nerves of steel to operate a business in turbulent times!
But there is a way to reduce that anxiety, and take the best possible decisions for your business – despite the uncertainty.
You need outstanding financial management, that gives you:
>> A deep, up-to-date understanding of your true financial situation through your monthly management accounts, so you don’t have to make decisions in the dark
>> Clarity on the financial implications of every big decision, so you have all the facts before moving ahead
>> A view of what’s coming over the financial horizon. Robust forecasts show what your cash situation and bottom line will be in the future
>> A more resilient business that can withstand shocks, by putting in place strong financial systems and process and identifying and fixing your financial weaknesses
>> Strong support when making financial decisions. You work closely with hugely experienced financial advisors, who can help you understand your financial options and make well-informed decisions with confidence.
That is exactly what you get when you work with our Outsourced Finance Department.
Then hit ‘reply’ to this article or call us on 01279 647 447 to discuss how we can help you grow and maximise your profit, even in these uncertain, unpredictable times.
Warmly,
Garry
