There’s no doubt businesses have faced one of their most tumultuous decades in the 2020s, with the fall-out from pandemic restrictions on staffing and consumer habits and the war in Ukraine affecting global supply chains.
When market conditions are challenging, it can be hard to plan for the future, and scaling up a business can feel unwise or even impossible.
But entrepreneur and investor Piers Linney says it is important to look to the bigger picture and beyond the recessions which are wreaking havoc in many countries around the world.
“You have got to be optimistic but also realistic,” Linney tells The CEO Magazine. “You need to readjust your plans for the market conditions but that doesn’t mean you give up on your long-term growth plan, you just have to rejig your short and medium plans.
“Do what you need to in order to survive – but also put yourself in a position to thrive on the other side of it.”
Businesses are caught in the middle
Inflation has risen to multi-decade highs in numerous countries globally and the cost of living has reached a crisis point for many. And as consumers buy less – considering more closely what they are purchasing – the cost of materials and labour have risen at the same time.
“We are seeing margins squeezed, businesses cannot always put their prices up or there will be an impact on sales, so often what happens is the margin gets squeezed and income goes down,” Linney says. “You need to think about how you can add more value, how to compete and if you can make products and services cheaper.”
The reduction in margin is having an effect both on businesses and CEO’s ability – and desire – to carry on running them. “At the same time the cost of living is going up in their personal life and you have a pincer movement,” Linney adds.
“If you’ve got a job, you might get a pay rise and although it might not be what you want it to be, at least you are getting a rise. Whereas people running businesses are essentially getting pay cuts.”
“If you’ve got a job, you might get a pay rise and although it might not be what you want it to be, at least you are getting a rise. Whereas people running businesses are essentially getting pay cuts.”
Linney is a former Non-Executive Director of United Kingdom’s government-owned development bank British Business Bank, which has helped many British small and medium-sized businesses, and he is passionate about helping companies navigate the difficult question of when and how to grow.
He will be imparting his years of experience in this role and as a Founder and CEO himself at The Business Show on 16–17 November, where he’ll set out the key five growth factors and his top tips to thrive in difficult markets.
Optimism is essential
Although there is no doubt that the next couple of years will be tough, Linney insists it’s important to remain positive and use this as an opportunity to fine tune your business.
“A lot of small businesses and entrepreneurs struggle during these periods but they bounce back very quickly afterwards,” he explains.
“The economy moves in cycles, it will come back but there is no point trying to sugar coat it, we just have to find a way to work through and on the other side there is always growth and opportunity.”
“My view is people who are entrepreneurs and starting businesses, they don’t stop because it is raining or because there is a recession. The way the powers-that-be want to grow the economy in the UK for example, is to focus on growth and a lot of that is going to come from our innovators and young companies – also mid-size scalable businesses.
“There is definitely a difficult time ahead but what that means is companies have to focus and become leaner. Post-recession you get a lot of businesses who have stronger foundations plus on the other side there is less competition.
“The economy moves in cycles, it will come back but there is no point trying to sugar coat it, we just have to find a way to work through and on the other side there is always growth and opportunity. And sometimes, with companies in competition who haven’t quite made it, there’s the opportunity to buy businesses.”
Lean times equal a leaner business
While debt becomes more expensive in many territories and recessions loom or are in full swing, taking stock and focusing on improving productivity is a sensible and easy first step.
“Growth introduces risk and people don’t want to do that – unless your business is discounting,” Linney says, who is also the Founder and CEO of Moblox, a next generation technology, communications and business tools platform for small business owners.
But he believes there is one area where many companies could do better. “We have to be leaner when we batten down the hatches and take out costs,” he says. “A lot of that can be helped with automation, which is why you should embrace technology and implement it into your business.
“You need to focus on adding value and making money – not admin and nonsense.”
“You need to focus on adding value and making money – not admin and nonsense. There is a huge amount of technology available and what I am trying to do with Moblox is help businesses understand their options so they make better purchasing decisions.
“One big problem we have in the UK, which the recession is not going to help, is productivity. We are not as productive as we should be and a big part of that is not really embracing or replacing technology which already exists. The recession might make us more efficient and perhaps more productive.”
The Business Show is returning for its 44th edition at the ExCeL, London. This year’s event is set to be its biggest yet with more than 750 exhibitors, 200 interactive masterclasses, live panel debates, speed networking and more than 200 seminars covering everything you need to know to start or grow your business. Hear from experts from some of the biggest companies in the world, such as Google, Meta and IBM, as well as talks from billionaire businessman and IWG CEO Mark Dixon and the winner of The Apprentice 2022, Harpreet Kaur. Click here to get your free ticket.
