Top issues facing businesses today
Businesses today face serious challenges as they set a path forward through unprecedented economic uncertainty. According to a recent Blue Paper conducted by distributor 4imprint, combining research from the CBI and Institute of Directors, each of the topics identified below are of paramount concern to business leaders alike.
Generally speaking, most people find great discomfort in uncertainty, and this is particularly pertinent for long-term success in business. Uncertainty in the global economy and the current recovery, uncertainty in the credit markets, uncertainty in how environmental regulations will affect business and ongoing changes in consumer behaviour all combine to show what appears to be a very uncertain future.
Essentially, uncertainty leads to a short-term focus and companies are shying away from long-term planning in favour of a more short-sighted outlook. While short-term goals are also essential, failure to strategically plan five or ten years into the future can end up destroying value. The problem to be solved, therefore, is to balance the need for a more reactive, short-term focus with the need for informed, long-term strategies. For more information on how to balance your short term plans with longer term strategies, visit our Strategic Planning pages.
A changing regulatory environment is always of concern in certain industries, but fluctuating energy, environmental and financial policy is causing concern for nearly all companies today. Whether it is the demand from customers or shareholders to become more “green” or the threat of increased costs due to new carbon taxes, environmental considerations are among the biggest challenges businesses are facing, and the sheer process of keeping up to date with regulations can be overwhelming. Globalisation and the growth of foreign trade has also added to the regulatory burden.
Understanding international markets and the role they can play in your business growth may be the key to survival for many firms but this comes at the cost of regulations and legislation affecting how you do business in other markets. The problems to be solved are to understand the meaning of regulation in your industry, its implications for your business, and to develop the skills necessary to deal with it. For more information on moving into international markets, download our Exporting for Growth guide.
The Institute of Directors (IoD) has reported figures from the credit reference agency Graydon UK stating that six out of ten small firms have a poor credit rating. Having a good credit score is important not only when you want to borrow money but also as it affects your ability to secure good terms on trade credit. If you are a fast growth company you can rapidly outgrow your available sources. If you are an underperforming company you may not be able to secure credit. The public sector and many large firms are shedding jobs by the thousands, and, as a result, the economy is relying on smaller businesses to create new ones, particularly in innovative sectors such as green technology.
Without bank support, these businesses will not be in a position to hire. For further information on successfully securing credit, read our Guide to Raising Bank Funding.
Waste control remains at the forefront of business strategy with many businesses now looking for more sustainable ways to manage costs long-term having already managed down their cost base through the recession. There is a distinct interest in streamlining non value-added processes, in particular use of cloud-based technologies and other shared services to ease increasing administrative demand.
Also on the rise is the potential to outsource those activities not considered core to business services to provide a more flexible and predictable cost base. This would be particularly appropriate during a time of uncontrollable rising costs such as fuel prices, raw materials and the higher VAT rate. To find out more about managing waste control and reducing waste in your business, download our Focus On Waste Reduction Programme.
Technology & Innovation
The pace at which technological advances are affecting businesses today makes capital investment in technology as much an asset as a handicap because a competitor may decide to wait for the next-generation technology. Similarly, the ability for even the best of technologists to stay informed about emerging technology is in conflict with the need to master a company’s current technological investment.
For smaller businesses, the matter of distinguishing which technology will garner the highest return in terms of time and investment capital can be equally problematic. The solution is to develop a long-term technology strategy while remaining flexible enough to take advantage of unforeseen technological developments. Visit our Technology pages to find out more.
For further information, please contact our award-winning Corporate Finance team.