The latest Office for National Statistics (ONS) survey to June 2021 showed that the UK gross domestic product (GDP) is estimated to have increased by 5.5% in Quarter 2 (Apr to June) 2021, revised from the first estimate of a 4.8% increase.
However, the level of GDP is now 3.3% below where it was pre-pandemic at Quarter 4 (Oct to Dec) 2019, revised from the previous estimate of 4.4% below. The increase in GDP was expected as the UK moved out of lockdown, however, more worrying for businesses is the rise in inflation and therefore a possible rise in interest rates that accompanies growth in GDP.
The news is not that positive right now and the TV and the press are currently full of worrying stories about global bottlenecks and supply chain problems, energy bills rising, HGV drivers and staff shortages. We have also seen rising prices, queues at the petrol pumps and now a flatlining post Pandemic economy.
The end of the stamp duty holiday, higher VAT in the hospitality industry and less generous universal credit payments mean the most immediate task facing the government is to prevent the economy from going backwards over the coming months.
All the negativity in the press can lead to us feeling “out of control” and uncertain about in what direction we should take our business. We firmly believe in our clients and their aims, hopes and ambitions and in remaining positive, we also believe the best way to predict the future is to create it!
There is an old saying “A sailor without a destination will never get a favourable wind”. It is easier to get to your destination with a plan. We all know this simple truth. If you are driving from A to B it helps to know where A is and the directions you need to take.
Planning ahead is the single most important exercise any business owner can do. If you have a vision of what you want your business to look like when it is “complete” then you are in a position to drive your business towards the vision and you can monitor how you are doing as you go along. If you do not have a plan then you could get blown around like “flotsam in the sea”, without any control.
If you agree it is hard to accomplish anything without a plan, let’s start thinking about how we can make it successfully through the coming winter and make our business more resilient to factors outside of our control. Here are our thoughts:
- Take time to review your personal objectives – the business is there to provide you with what you want from life, and this is the most important element of any plan.
- Look at where the business is now, its strengths, weaknesses, opportunities and threats and get a clear understanding of its position in the marketplace, the competition, the systems and the way things are done and the improvements that could be made.
- Focus on what the business is to look like when it is “complete” or running profitably and successfully. Then you can determine priorities – the big issues that need to be focused on – this is the plan!
- Write down the plan and define what it must achieve, and the actions needed. Monitor how it is doing towards the vision each month and what actions have been completed and what needs to be done to keep the business moving towards the plan.
- Allocate responsibility for taking the actions.
- Monitor, review and adjust regular activities to keep the business on track towards the plan.
It is also a good idea to look at where you are now and plan for a range of scenarios “good and bad” so that you can be flexible about the direction you should take.
Ask us about our “what if” scenario planner which takes your projected 2021 figures and allows you to see the effect on profit and cash of improving five key numbers and our business planning workshops which will help you work through the above six points.
Please talk to Will Abbott about helping you with forecasting and planning for the next few months. Will has helped many clients with “what if” scenarios and their future planning. You can give us a call on 01242 776000 or email firstname.lastname@example.org to arrange to have a chat with Will.