A few weeks ago, I went to a conference by the Heritage Railway Association.
The economy was naturally a big topic of conversation…. But possibly not in the way you might expect.
Initially it was very much doom and gloom.
But my position was that the British population can still, broadly, be put into two buckets.
First, there are lots of people who – despite the economic crisis – actually aren’t hurting that much. They don’t have mortgages or dependent children, and they can afford their energy bill.
These people are still going out and spending on experiences that others might balk at.
Then there’s a second group – people who are really struggling and have very little money left over for discretionary spend.
There are opportunities to sell to both those groups.
For example, on the North Yorkshire Moors Railway, where I am Finance Director, we have a Pullman ‘silver service’ dining train where people are served a beautiful meal as they cross the North York Moors National Park.
It sells out very quickly…
…Which means we’re either not charging enough, or demand is so high that there’s room to sell more of these experiences.
Meanwhile, those who are struggling might choose to take their holidays in the UK rather than go abroad. They are still looking to make memories and have fun. But because funds are tight, they need to see more value for their money.
What if – for example – we provided a second day for free, whenever they bought a ticket for the railway? It might make the railway a much more attractive day out – whilst helping and serving young families and other deserving customers.
There are many other ways to sell to both these groups, but the point is that the market is shifting due to changes in the economy and this provides businesses with opportunities as well as problems.
How can your company take advantage of these openings?
If you’re aiming to grow in 2023, it’s something you need to consider.
What I would caution, though, is that adjusting to these demographic and economic shifts takes data, and in particular financial data.
For example, you need to understand where the profit lies in your business. There would be no point turning out more dining trains if there’s no margin on those meals. (But it would be a sure sign we should raise the prices…) And you need to understand the knock-on effects of the decisions you take to prompt growth. For example, if we ran more of the special diner trains, could we find the people to staff them – and how would that affect our margins?
As always, the financial repercussions need to be worked out properly.
That’s where we can help you.
Our Outsourced Finance Department is here to help you grow faster and maximise your profitability – even in difficult times.
And a large part of that is giving you the tools and support you need to take financially responsible decisions, based on real numbers rather than on gut instinct.
–> To find out more about the Outsourced Finance Department, click here.
Then hit ‘reply’ to this blog or call us on 01279 647 447 to talk to us about how we can work together.
Warmly,
Garry
