All businesses operate within a larger economy, and even the largest of companies are not immune to the effects that economic instability can have on profits. Changes in tax and regulation can significantly increase costs for companies; changing exchange rates can have the same effect and consumer uncertainty can leave businesses with an ever-dwindling demand for their products or services.
It’s not all doom and gloom, though. There are plenty of businesses which thrive when there is uncertainty in the market as they are well-prepared and able to withstand change when their competitors cannot. Here are some practical ideas on how you can prepare for instability and be resilient.
The pressures of a competitive market are enhanced and exaggerated at times of uncertainty. The best way of maintaining growth through this period is by keeping your competitive edge, but this can be difficult if your costs are increasing and demand is falling. When costs are determined by these external factors, it becomes crucial to improving productivity, to make back what was taken by the increased costs.
Undertake a business process review to ensure that you are really getting the most out of your staff, resources and business systems, so that you are as productive as possible and costs are kept to a minimum.
By using continuous improvement tools and implementing a lean strategy, you’ll automatically be making your company more robust to economic turbulence. Whether you implement this strategy when times are good or when times are hard, sticking to it will automatically bring business improvements and increase efficiency.
Part of your lean implementation can be to cut down on liabilities by not keeping excessive amounts of stock. You can do this by implementing a good business management system to continually assess and refine your operating processes, matching supply and demand. Running your company in a lean manner will help protect your business from financial difficulty by providing a buffer from macroeconomic downturns.
Although difficulty in the economy is likely to restrict capacity, budget and capability, this is the time when it is more important than ever to be adaptable. Being flexible means being more reactive to changes in the macro economy. If you are the first to react, you’ll take your company ahead of the crowd and beat the competition. Lean strategy helps enormously in this endeavour, as it ensures that the business is carrying far fewer inefficiencies to hold it back.
It might feel like going against all your instincts but continue to invest and hire new staff if you need to. Hold back on unnecessary expenses, and cut costs where you can safely do so, but don’t stop investing back into the business. It has been proven that companies who maintain their investment in their future throughout these turbulent times are the ones which are likely to prosper in the long-term.
WinMan ERP Software is a comprehensive all-in-one business system which offers a market-leading ERP solution for all sizes of business. It’s the perfect accompaniment to lean strategy policies to streamline and continually improve existing and new operational processes, especially during hard times.
Contact us today to find out more.