Roger Pemberton - the challenges facing Norfolk’s independent businesses and how to overcome them
When I discuss the current trading situation with independent business owners in Norfolk, I find some who are experiencing tough times while others say business is booming. So, why is it that some seem to flourish whilst others struggle?
I believe there are four key factors that businesses within all sectors are facing right now:
• Continued shortage of cash creating pressure on credit terms and cash-flow
• Selective purchasing
• Continuing weak consumer spend
• Reduced confidence.
I strongly believe independent businesses are in a better position to manage these factors as they have one major benefit against the big boys: flexibility. Independent businesses can review their forecasts and quickly adopt new strategies to put their business back on course.
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Businesses tell me they're struggling from a shortage of cash as customers are taking longer to settle bills. This is one key area where all firms need to build their defensive strategies and set their own cash gap reduction plan. This means implementing strict cash collection processes and revising the credit terms for suppliers and customers alike.
It's also worth remembering that credit should be earned rather than assumed as a right. So review your credit terms and only offer to those who it is worth waiting for their money.
It is proven that in a cautious market, customers do not buy until they have convinced themselves they need your product.
Therefore, it is more important than ever to differentiate your products or services from the competition and re-state the case for your products. This includes your website, advertising and PR – do your customers trust your service and feel they need what you offer?
Independent businesses can quickly respond to changes in customer demand due to lower stock levels and a faster decision making process. For example, when a retail business experiences a quieter time, they could innovate with the ranges they offer. To do this effectively requires time to thoroughly research your market and competition.
As Chair of Norwich Lanes and a member of the Norwich BID team, I believe independent businesses can really improve on raising brand awareness levels and providing confidence.
One cost effective way to do this is through attending and joining local networking events. Not only does this make you visible but business owners can communicate with like-minded businesses and discuss strategic alliances. It is also encouraging to hear other positive stories from other businesses.
By developing a clear strategy to overcome the challenges facing businesses, I believe local independent businesses can make the most of the current trading situation.
Roger Pemberton is Chair of Norwich Lanes, on the steering group for the Norwich Business Improvement District and a business coach with Action Coach.