I think it’s fair to say that businesses are navigating some choppy waters at the moment. The UK’s divorce from the EU, the Trump effect, and rapid advances in technology are changing global market dynamics and leaving many organisations trying to figure out what it means for their business, and its future.
Despite this, the North East is awash with ambitious businesses cutting through the waves and going full steam ahead towards their destination. That’s what makes the North East business community so vibrant, energised and resilient.
Recognising the world is in such a state of flux means many businesses are pausing for thought and comprehending the risks and opportunities.
So what can you do to make sure your business capitalises on the upsides and minimises its exposure to the downsides?
Don’t be overly reliant on one customer, market or supply chain
Most businesses enjoy early growth on the back of a particular customer or market. Some businesses grow to a significant size whilst having most of its eggs in one basket. This isn’t always a comfortable place to be; it’s likely the customer will wield power and influence over your business and, overtime, the relationship may become unprofitable and demanding of more time and resource.
If you’re caught in this trap then it’s essential you create the time, space and resource to think about extending your customer base. You could start with targeting new customers in existing markets, gradually spreading risk and affording the time required to consider diversifying into new markets. This is easier said than done, especially if the controlling customer wants to keep you all to themselves. For the long-term health and sustainability of the business though, it’s an essential move.
Go for it - identify your strengths and take them to places they’ve never been
Not being overly reliant on one customer, market or supply chain means you need to identify and win work in new ones. This could mean new sectors and new geographies - domestically and internationally.
Start by identifying not what you produce, but rather what you’re really good at. Most businesses define themselves by their end product, but what the customer actually values is the competencies the business uses to produce the product.
If you haven’t already done so, ask your customers what they really value about you. Why do they deal with you rather than your competitors? Once you’ve identified what you’re really good at - otherwise known as your unique selling point or value proposition - develop as many ideas as possible around where you could apply your strengths, and grade them in terms of growth potential and ease of implementation. Needless to say, go for the ones that represent the most growth and easiest implementation.
Make your products and services stickier
It’s not all about looking for opportunities outside your existing customer base and markets. To retain and grow the value of profitable customers, develop ideas for models that make them more likely to retain and invest in your products and services, especially if their trading circumstances take a downturn.
If there is a downturn, how can you make sure your products and services aren’t in the firing line? Think about how you can become sticker; how you can become a core requirement rather than a ‘nice to have’. This could involve introducing services to complement your existing product offer, requiring a longer term contractual relationship, or embedding technology that’s integrated into the customers’ core processes that’s difficult to uncouple.
Develop a flexible and adaptable culture
In fast changing and unpredictable times, there is no straight line to the future; you will be in a state of constant adjustment. It’s essential to have the right people on board who are clear on where the business is heading, and can self-adjust and realign. It’s also highly likely that unexpected stuff (excuse the technical term!) will happen and you will need people in your business who are great at just picking stuff up and sorting stuff out, regardless of their position or job description. Do you have these people in your business? If not, then you need to find some.
There is much more to consider and spreading risk and building a higher level of commercial resilience will demand different things from different businesses. Hopefully the points above begin to illustrate the types of things businesses should be thinking about as the UK prepares to leave the EU.
The great news is that businesses in the North East have access to a new programme called Supply Chain North East, delivered through the North East Growth Hub, which has been specifically designed to support businesses to win new customers and enter new markets.
To make sure you’re not missing out, and to find out more about how Supply Chain North East and other business growth and finance programmes can help your business, contact the North East Growth Hub team on 0191 338 7468, email [email protected] or visit www.northeastgrowthhub.co.uk.