Business Failures Up By a Third Year On Year But How Many Could Be Avoided?

Recent statistics have been released showing that business failures are 30% up year on year. Banks are talking about far more of their customers going into their ‘recovery’ or ‘special measures’ teams and while this does not necessarily mean the end, as many indeed do recover, it is hardly the scenario that a business owner wants and frankly neither do the bank!

It is difficult to generalise but, robust as our SME market is, we feel that a number of businesses have fallen into a false sense of security and comfort having benefited from the schemes provided and backed by the Government across the pandemic and post pandemic period with loans, furlough, payment holidays etc.

It is clear however that 2023 is truly where the ‘rubber hits the road’ and funds picked up from loans and assistance will quickly evaporate as the business starts moving again and operating in a market that will inevitably have changed since 2019. A number of businesses are, frankly, finding the going tough in their post pandemic market.

So, how do we see things? Surviving and thriving (in any market circumstance) isn’t necessarily easy but it isn’t that difficult either if the right steps and actions are taken at the right time. Now, timing is absolutely crucial and to achieve what is necessary, businesses must think ahead, think differently and answer a very simple question:

You must be able to answer this question and be able to articulate why to your marketplace. Businesses that have a true differential, whether that be a unique product or service, a better order fulfilment system, a more efficient production process, better new product development etc. have every chance to survive and thrive in any market. These differentials allow the company to secure new business and crucially retain existing customers/ clients who cannot find whatever the differentials specified are, elsewhere.

We have deliberately steered clear of price as a defining differential. Of course it is a big advantage if a business can offer the best product at the best price but all too often this is at the expense of what keeps the doors open – margin and profit. If you have a differential beside price it is far easier to retain those healthy margins and profits that take your business towards prosperity and remember, as we outlined in our last article, you cannot SAVE your way to prosperity.

Finally, it is worth saying that even the best advantages and differentials can be wasted unless your business possesses a skilled sales team that are capable of presenting your business in the right manner and capable of firstly establishing the precise needs of the customer/ client and then matching the products/ services you offer to those needs and selling the solution persuasively. In doing this your top line revenue will grow significantly and profitably and in markets that are competitive – YOU will win more market share and send some of your competitors in the wrong direction.

So, define your differentials now and if you aren’t 100% clear on what they are, ask us for some help in defining them with you. We have helped nearly 400 businesses become successful or more successful in the toughest markets and trading conditions. There is no better time than now, for to procrastinate will only delay the benefits for your business and in the worst case, condemn your business to become another sad statistic when it could be thriving.