The last three years have been taxing for businesses worldwide. The pandemic tested the resolve of organisations as many industries shut down, and those that remained open shifted overnight to online working.
Those firms that survived would have hoped for a period of economic uncertainty to rebuild. However, ongoing shutdowns in China, combined with rising energy prices and currency volatility have seen the difficult business environment prolonged.
Difficult trading environments shouldn’t be the end of a good business, however small that firm may be. If your organisation is looking at ways it can steel itself against economic headwinds, here are some avenues that are worth exploring.
Speak to your accountant
Your accountancy firm should be offering you more than filing your tax returns and running payroll.
Great accountants will have taken time to understand your business, and they’ll have a broad view of the market conditions and how similar firms are adapting to them.
Speak to your account about what they would recommend, where they see pinchpoints coming down the track and any governmental or tax-relief help that could be on offer.
Reduce business expenditure
The natural response to any economic uncertainty is to pull spending. This is the great fear of banks and governments when recessions loom, and often they incentivise continued spending through tax breaks on large business purchases.
Look to see if any potential schemes like this are applicable, and if not, look to build a bit more of a financial buffer by curtailing some business spending.
One area could be in reducing how many days employees are in the office, or even switching to a remote-first model of operations. Another quick win is to try and negotiate better deals with suppliers, either by shopping around or negotiating longer contracts.
Re-focus marketing efforts
One of the biggest discretionary spending areas for any business is in marketing and advertising. Shutting off all marketing spend entirely is rarely going to be the right approach to try and ride out an economic storm, but efficiency savings can always be made if you look hard enough.
Analyse where your marketing dollars are being spent, and which channels are driving you the best return. Also assess which target audiences are engaging (and spending) most as a result of your advertising. If you want to cut 25% from your marketing budgets whilst minimising the negative impact on returns, then focus those efficiency savings against audiences that deliver a less than preferable return on investment.
