How Can Businesses Survive in 2023?
With recession on the horizon, the threat to businesses has never been higher.
In such volatile times, it is important that businesses affirm the best practices to maintain growth and profit. With Goldman Sachs predicting the UK to be the worst performing economy in the G-10 (1), many companies will be looking for ways to maintain their revenue and, perhaps, even expand. In doing so, it is important to recognise the risks and manage them appropriately.
We’ve identified the five biggest risks to businesses in the UK in 2023 and the ways in which you can prevent them:
1. Recession
The global rise of inflation rates is a result of both economic fallout from the COVID-19 pandemic and supply side issues, such as the war in Ukraine. This has caused a recession, with GDP in the UK set to shrink by 1.4% in 2023 (2). This means people will have less spending power, which in turn, will harm the revenue of business, especially independents and SMEs. .
Solution:
Surprisingly, one of the best ways to address a recession is regarding it as an opportunity. Recession is a time of great economic and social uncertainty, meaning new industries and trends can find themselves thrust to the forefront of popularity overnight. For example, 85% of industry leaders were toppled by the 2008 global banking crash (3), which left the door open for new organisations to take control.
Furthermore, it is important that poor initial results are not accepted as the status quo. In 2001, less than 30% of companies that lost market share were able to recuperate their positions. To help stay afloat and ahead of the curve t is vital that companies are constantly looking to innovate and adapt.
This relates closely to another form of mitigation – diversification of revenue streams. Although not possible for all companies, considering alternative funding options is important for maintaining cash flow and liquidity, which is important for surviving a recession. In New Zealand, Good George Brewery exhibited this during the COVID-19 pandemic when they counteracted a downturn in sales by producing hand sanitiser instead.
2. Cybersecurity
Cybersecurity is now such an important and sophisticated issue that it is no longer considered the sole responsibility of IT technicians. As of 2022, 88% of board executives consider cybersecurity a business risk rather than an IT problem (4), meaning it is dangerous to the overall position of a firm, rather than just its technology.
Solution:
There are several ways in which cybersecurity can be addressed. The first and most simple: update your software. Attackers constantly look to target the weak spots in traditional software, such as Windows and macOS, but updates plug these gaps and keep systems from being jeopardised.
Updating your system is just part of a wider solution to cybersecurity issues – education. The best way for managers to ensure their staff are taking appropriate measures to protect their digital technology is by showing them the way to do it. This can be encouraged through a clear and concise online behaviour policy, or the regular provision of links, material, or online courses that encourage better day-to-day practices.
3. Reputation
An increase in activism and social justice movements is putting the reputation of small and large companies at risk. The internet has facilitated greater access to corporation and information, meaning public scrutiny of business is at an all-time high. A positive corporate reputation is vital as consumers prefer to purchase goods and services from firms that they perceive as credible and trustworthy.
Solution:
The best practice for ensuring a positive corporate reputation is to regularly check social media and online forums to gauge the discussion surrounding your brand. Many marketing experts suggest that SMEs check Google and social channels at least once a week to remain responsive to the issues and perceptions that customers have of your company.
Another way to cultivate a positive reputation is by operating in a manner that generates good press. Engaging with customers, creating exciting content, or addressing negative reviews and complaints. are just a few ways that you can garner positive coverage.
4. Staff satisfaction
One trend that has remained at the forefront of discussion since the COVID-19 pandemic is the treatment of employees. There has undoubtedly been a dramatic shift towards employee wellbeing, with the introduction of remote and hybrid office hours. It is such an important issue that many are making it a condition of their employment, conveyed by 81% saying a supportive work environment is crucial to their decision making (5).
Solution:
There are measures and processes that can be put in place to give you the best chance of maintaining high morale amongst staff. For example, with 20% of employees quitting within 45 days of employment (6), the introduction of concise and effective onboarding measures can be vital towards keeping staff satisfied.
It is also important that managers support struggling employees, rather than overwork them. Studies have shown that giving staff the tools to improve their skills and productivity has a far greater effect on output than enforcing extended hours. Not only does this improve employee satisfaction by facilitating more free time out of work, but it also makes them feel valued as an individual rather than just an employee.
However, the best way to maintain high levels of employee satisfaction is to listen. One of the most important roles of a manager is to listen to staff feedback, suggestions, and criticisms to try and cultivate the best working environment possible. Not only does this create a more optimised experience for staff, but it also makes them feel valued as individuals and shows that their managers care about their lives as much as they care about the output they produce.