Dr John Risk, Senior Lecturer and Programme Leader at Warrington School of Management, University of Chester discusses the challenges faced by today's businesses and how to rise to them.
There is
never an easy time to run a business, especially for people leading small to
medium sized enterprises. The challenges are many and changing all the
time; some are closer
to your business and you have the time and knowledge to sort them out to
survive, make a profit and grow. Meanwhile, external and international factors are
impacting on your business, demanding response.
Few
businesses are immune from global impact. Something happens unexpectedly across
the world and the shock reverberates. Whether it is natural disasters or new
competitors and ways of providing your product or service, conditions are
changing. This is what academics call
“the business environment” which in the modern world is highly dynamic. These challenges
for businesses of all sizes have to be addressed and anticipated so you can
spot business opportunities and keep ahead of the threat of competition or
substitution in the market.
There are
certainly plenty of these challenges around. You need to know your market and
your customers and where the industry is heading, competition is fierce. That
alone keeps you on your toes but then there are all the factors more outside
your control and uncertainty abounds.
Economic Challenges
Economic cycles
rise and fall for varying lengths and time periods. The economic trends are
currently on the up after four to five of the most difficult years for nearly a
century, especially within the financial sector. As recent problems and scandals have
exposed, the banking system is still fragile. Interest rates remain low and the
Bank of England’s forward guidance indicates that this will be so for a while.
However, the necessary loans for investment (and in some cases survival) are
still not properly feeding through to small businesses, who are seeking
alternative solutions. Maintaining
investment in Research and Development and managing innovation are crucial to
business growth, not just for global firms but also for many small to medium
sized enterprises.
Closer to your
business, cash flow is a perennial issue, with late payment of debt by customers,
especially larger ones, a problematic concern.
You have taxation matters to address and all the regulations that surround
your business and the Chancellor and Government seem always keen to change
these as in the recent Autumn Statement and the Budget in the spring. More locally, there are business rates to
consider, with a particular potentially negative impact for example for high
street stores competing increasingly with out of town and on-line trade.
Regulations (red tape) local, national and European
will abound in your field and all this takes time and resources away from your
key business priorities. Some regulations may seem well founded for example
within health and safety; but with others, seemingly pointless detail takes
over, grows and becomes an excessive burden for business. Indeed, regulatory and legal issues and constraints
are generally growing in the aftermath of the corporate governance problems of
recent years.
Corporate Social Responsibility
Increasingly
too businesses of all sizes wish or seem expected to show customers and
stakeholders their ethical and environmental credentials. Some of this makes
good business sense for example in reducing utility costs over energy and fuel
usage and potentially improves the organisation’s image with the public. At
best this can be a “win, win” for both business and good causes.
Infrastructure
issues such as road condition, congestion and future transport development are
vital to varying degrees. This is even before we consider the pros and cons of
longer term issues such as the proposed HS2 rail development and all that
means; not least to business and residents close to it but not necessarily
feeling the full benefits. There are
more local business issues such as parking or Planning Development, Transport
Plans, crime levels and access to local contract opportunities.
You need,
through workforce development and training, to maintain and develop the skills
and qualifications of both yourself and your workforce in order to have the
skills to meet global challenges and changing markets. Education has a role in
providing you with people with the aptitudes, skills and right attitudes for
the workplace, and in developing and training your staff. With an increasingly
knowledge based economy this is all the more crucial. IT and information systems are changing all
the time. Many industries are experiencing technological change of
unprecedented proportion and a flexible and appropriately skilled workforce is
essential.
There is
your own work life balance and trying to fit in family time, your own education
requirements and training, as well day to day operational matters and strategic
planning for your business. Not yet to mention your own long term financial
concerns or pension provision.
Look Ahead
Before you
start reaching for the blankets and pulling the bed covers over your head, in
many ways all these issues challenge you to lift your head and look to the future
direction of your business.
How far
ahead you look and plan is a matter related to your own business and sector.
Not many take the view of the likes of companies like Shell who look ahead 30
or more years given the long term nature of their markets, investments and projects.
For you the timescale may be far more modest and relatively short term but
still crucial. Whatever your planning horizons
may be, market opportunities are changing.
In taking a strategic view, business
organisations and networking opportunities through the likes of Warrington
School of Management are a resource to be harnessed, helping you meet new customers
and suppliers, develop new ideas and take a wider view. There are lessons to be
learnt by keeping in touch with business networks and knowledge bases in anticipating
the changes in your industry, market or sector and positioning your place in it
for the future.
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| The team at Warrington School of Management |
Dr John Risk is Senior Lecturer and Programme Leader at Warrington School of Management.
To find out more about us visit our website, email wsm@chester.ac.uk or follow us on Twitter
