If the past few years have taught us anything, it’s that waiting for economic certainty is probably a losing game.
Inflation, interest rates, changing tax policies, skills shortages, geopolitical tensions and shifting consumer confidence can make it feel as though businesses are constantly dealing with new challenges.
The latest Vistage CEO Economic Outlook and Economic Update reports paint a similar picture. Confidence in the wider economy remains fragile, costs continue to put pressure on businesses and many leaders expect the months ahead to remain challenging. At the same time, many SME leaders are still planning for growth, investing in their businesses and developing their people.
At first glance, that might seem contradictory.
In reality, it’s exactly what successful businesses have always done.
Focus on what you can control
One of the biggest that mistakes businesses can make is allowing external uncertainty to drive internal indecision.
Of course, it’s important to understand economic trends and keep an eye on market conditions. But business owners can’t control inflation, government policy or global events.
What they can control is how they respond. I say respond rather than react. A response is often far more thought out and strategic than a reaction.
The businesses we see performing well are typically focused on the fundamentals:
- Understanding cash flow and forecasting regularly
- Reviewing pricing and profitability by customer, service or product line
- Keeping a close eye on costs without compromising long-term growth
- Strengthening relationships with existing customers
- Ensuring they have the right people in the right roles
It’s not about standing still until conditions improve. It’s about making informed decisions based on the information available today.
Growth looks different in uncertain times
Many business owners associate growth with expansion, acquisitions or significant recruitment plans.
Sometimes growth is much less visible than that.
We’ve worked with businesses that have increased profitability through process improvements, better management information, technology investment, stronger financial planning and which invest in the senior leadership team. Those changes may not make the headlines, but they can make a meaningful difference to performance – and to business owner stress levels!
A few questions worth asking:
- Do you have timely and accurate management information that supports decision-making?
- Are there manual processes, or worse duplicated processes, that technology could streamline?
- Have you reviewed your pricing strategy recently?
- Do you understand which areas of your business are delivering the strongest returns?
- Are you investing your time and resources in the areas that create the most value?
Periods of uncertainty often create an opportunity to step back and ask these questions.
Leadership matters more than ever
One of the most encouraging findings from the latest Vistage research is the continued focus on leadership development despite ongoing economic pressures.
That makes sense.
When things are relatively stable, weaknesses can often go unnoticed. When conditions become more challenging, leadership becomes increasingly important.
People look to leaders for clarity, direction and confidence. They want to understand not only what decisions are being made, but why.
For SME leaders, that means:
- Communicating openly with teams
- Being realistic about challenges without creating unnecessary anxiety
- Empowering managers to make decisions
- Continuing to invest in skills and development
- Making time to work on the business, not just in it
The businesses that emerge strongest are rarely those that avoid every challenge. They’re often the ones that adapt quickest when circumstances change.
Don’t let uncertainty delay important decisions
One theme that often emerges during uncertain periods is delayed decision-making.
Businesses put off investment. Recruitment plans are paused. Strategic projects are parked until things become clearer.
Sometimes that’s the right call.
But delaying every decision can be just as risky as making the wrong one.
Whether it’s succession planning, technology investment, tax planning, accessing funding or addressing operational inefficiencies, many of the issues facing businesses today won’t solve themselves by waiting.
In fact, periods of economic uncertainty can be the best time to strengthen the foundations of a business while competitors remain distracted.
Reasons for cautious optimism
There is no doubt that businesses continue to face pressure from rising costs, taxation and regulation. Those challenges are real and shouldn’t be underestimated.
Yet it’s encouraging to see so many SME leaders remain committed to growth. Recent Vistage research found that many leaders still expect sales revenue and profitability to improve over the coming year despite the wider economic backdrop.
Business owners have always been resilient. They have navigated recessions, political uncertainty, a pandemic and countless market changes over the years.
Today’s environment is another challenge to overcome, not a reason to stand still.
The businesses most likely to succeed won’t necessarily be those operating in perfect conditions. They’ll be the ones that continue making good decisions, stay close to their numbers, invest in their people and remain focused on the things they can control.
And that’s something worth being optimistic about.
