Why participating in a recession will kill your business.
There’s a lot in the news right now about the ‘cost of living’, inflation, and other vague but economically threatening stories. There is some truth in them, but the sense of proportion and perspective has been lost in the noise.
A realistic perspective.
The UK economy is currently just 0.5% smaller than it was a year ago, That’s 50p in every £100 of economic activity. That after being adjusted for inflation too. In other words everything is to all intents and purposes identical to where we were a year ago.
Those who are experts or masters in their business look at this sort of thing and take, basically, no notice whatsoever. Those who run a strong business, based on well researched knowledge, honed skills and deep experience take a different approach. I’ll return to that in a moment.
Recessions are granular, with some sectors badly affected, others which continue to thrive. Within each sectors there are variations too. How your clients are affected is something that only you can judge. How you react will determine your businesses success.
Inflation does affect us all and means almost every business will need to raise prices, and, in general, clients expect that, and they are probably doing the same. An action for each of us is to review our client roster and plan when to have the conversation about a price increase. It’s worth looking at your own costs and how they are changing as, whilst inflation affects us all, our own inflation rate will not be the same as the government’s headline figures.
Business Mastery.
Masterful businesses look at their markets, they are curious about how their clients are faring and how the economy is affecting them. They help their clients understand their own context so that they make informed decisions. Curious too about how they can adapt their services and products to provide additional value. The masterful will thrive, and they thrive because they focus on their clients (and prospects), and the value they bring to them. If you sense that your clients are becoming wary of the economic impacts of what is happening, then be curious about their understanding, their experience, and their plans. Ask them for a discussion, and listen carefully to their assumptions. In that curiosity lies opportunity.
2023 beckons and for many it will be a superb year. Are you ready to be one of those businesses, or one that participates in recession?