Often the manufacturing sector is the pit canary of the UK economy. It certainly bounced back from the pandemic with order books that have been full in recent months. There is no doubt that it’s not been easy within the challenges of global supply chain constraints, Brexit and challenges hiring people.
However, in recent weeks we’ve spoken to many owners of manufacturing companies that have seen order books soften, and the future seems much more uncertain. Indeed, data from the CBI suggests that British factories are seeing output growth slow slightly in the three months to June and is expected to ease further in the three months ahead.
In this kind of market, it would be easy to batten down the hatches and ride out the storm. However, there are opportunities in every market and steps that management teams can take to ensure they have the flexibility they need.
In this economic environment, cash is king. So it is important to ensure credit control is optimised. Any superfluous expenditure is cut, and operational efficiency is reviewed. A fresh pair of eyes can unearth new ways of working.
Consider focusing on the customers that generate the most profit. Unprofitable customers are just that and can move from being a drag on growth to a real risk to the business in difficult times.
Don’t turn off marketing spending. Customers are still out there and may need new suppliers if their existing partners hit difficulties. It may also be worth thinking about how to enter new markets cost-effectively. Examine if your sales team is delivering the numbers you need to grow your business and consider changes or expanding it if necessary.
Hang on to staff wherever possible. Over the last 12 months, recruitment has proven a challenge and a brake on growth. If cuts to payroll need to be made, consider speaking to staff about shorter working weeks.
New technology can help unlock operational efficiencies and even address supply chain issues through enhanced data sharing. Investing in advanced technology could give your business an edge in a challenging market.
A flexible funding partner is also essential. And this is where Fresh Thinking Advisory comes into its own. We set up the business to back entrepreneurs that have a bold vision for growth. If there is a market opportunity, perhaps to purchase plant or even a competitor, then we are there for you. It’s an approach that has driven our growth and created lasting business relationships.
Fortune favours the brave may be a truism, but time and again, we meet business leaders who took a risk and built successful businesses. More often than not, it’s a relentlessly positive attitude that gets them through the tough times and gives them the focus on the end goal.