Managing a Business through Government and Economic Fluctuation

 

 

Victoria Brocklesby is COO and Co-Founder at Origin, the UK’s leading manufacturer of aluminium doors and windows. Throughout every part of Origin’s 20 years of success, Victoria has been driving the company to be a trailblazer within UK business.

Here she offers her insights on how to manage a business through the ever-changing merry-go-round of public policy and government officials which makes it very difficult to plan for the future. 

How did we get here?

In 2022, the UK had three Prime Ministers, four chancellors, and several cabinet reshuffles. The government’s ‘mini budget’, announced in September, sent the markets into turmoil. The pound hit an all-time low and interest rates soared. We are still feeling much of this fallout now at the beginning of 2023 with consumer confidence diminished and many being more careful than ever before with how they spend their money. 

For businesses, it means that competition is fierce and across industries, companies will be battling for every sale. Taking the construction industry as an example, straight out of COVID, there was a mass groundswell of opportunities. Many couldn’t take on any more work, they were that busy. Part of this was fueled by pent-up demand, while other people simply brought their 2022 plans forward because they no longer wanted to wait. As the UK prepares for a recession, this demand is waning. 

How do we navigate through?

Future-proofing and making business decisions that will stand the test of time has never been more important for the long-term outlook of enterprise, but this is easier said than done. Here are a few tips as I see it:

1.Consider your brand positioning and reputation 

Although consumer’s priorities might be changing, they will always want to spend their hard-earned money with trustworthy, reputable brands. Doing so gives them confidence that their money is in good hands and their investment, even on small purchases, is a solid one and they as a result will be protected. They don’t need to be worried that their warranty will be void in six months because the company they bought from has gone under, for example. 

At Origin, our entire business is founded on our impeccable service, and we’ve successfully built a reputation synonymous with quality around this through 20 years of innovation. Now is the time use your brand reputation to your advantage. Shout about why customers love you to build confidence and trust. 

2.Be fiscally responsible 

As Andrew Bailey, Governor of the Bank of England, said following the announcement of the mini budget: “Flying blind is not the way to have fiscal sustainability.”

As we have seen with previous recessions and periods of market fluctuation, namely back in 2008, the businesses that fail to get their ducks in a row or be fiscally responsible will suffer the most. Offering cheaper products at lower prices to undercut the competition might seem like the solution in the short term, but will lead to the disintegration of reputation, diminished quality and service, squeezed margins, and potentially the failure of the business. 

Planning and maintaining a rainy-day fund has never been so crucial. Your financial plans also shouldn’t be static. They should be living and breathing documents that are being constantly reviewed and monitored against. This will empower senior leadership teams to have the confidence to move forward and make decisions. After all, the best time to invest is when your competitors are cutting back on their spending, as it will also allow you to take hold of more market share. 

3.Don’t panic 

The biggest lesson we learned at Origin during the 2008 recession was to not panic. If you have a great product and service offering, keep going with it and stick to what you know. Our underlying goal is to ensure that every aspect of our business adds value. If it doesn’t, then we shouldn’t be doing it. 

Obviously, don’t ignore red flags, but panicking will lead to an immediate reaction, rather than proactive change. Always reacting will make you feel like you’re constantly chasing your tail, never able to get ahead of the problem. Make sure you lean on your financial experts to anticipate the future so you can make informed decisions. 

End notes 

Last year was one for the history books. Now we must manage our way through the aftermath. We don’t wholly know what 2023 has in store, which only makes the need for planning more crucial than in any ‘typical’ year. Keep a tight grip on the things within your business’s control and don’t panic. We’ll see 2024 soon enough.