We are facing times of huge political uncertainty. Times where financial markets seem to swing from the worst of times, to best of times in a matter of hours, where not only the reality of global uncertainty dominates, but people’s perceptions of economic crisis compounds this reality with spending habits changing.
So how can we build businesses and entrepreneurs with a resilient, Brexit-proof plan, that will enable them to thrive through the uncertainty?
No-one knows what Brexit will bring, we can predict of course, but as an unprecedented move by Britain, we can only prepare ourselves for some potential hurdles. While the strength of the pound should be considered, the most likely economic hurdles will come with the change in spending habits, so what can we do to prepare ourselves and our businesses? And what about those of you looking to invest in a business?
The recession of 2008-2009 showed us that certain types of business were incredibly vulnerable to economic downturn, but it also showed us those that were resilient, some by their very nature - accountancy, financial advisors, rental agents and home improvement companies (because people sought financial advice and stayed put or downsized homes), but others showed great adaptability, for example estate agents that incorporated rentals, as this part of their market grew over sales, supermarkets that marketed themselves as more ‘affordable’ and less ‘luxury’ than previous periods, Sainsburys is a great example of this as they gave vouchers at the tills for the difference in shopping price, should Tesco equivalent shop have been cheaper.
Investopedia spoke of investing in economic downturns, and said ‘these are difficult environments, but they also coincide with the best opportunities.’
Bring this to the uncertainty of today and take heart in Google chief executive Sundar Pichai, as he announced on November 15th 2016, that Google will be investing an extra £1bn in the UK creating up to 3000 new jobs.
Franchising has thrived over the past decade despite the turbulent times economically, the UK franchising industry has seen monumental growth of 46% even with the ‘great recession’ dominating the spending habits over this period, with 97% of franchisees recording a profit.
Why are franchises so resilient? Well, by their very nature the business model is tried, tested, adapted through trying times and then proven time and again in different territories. The business is supported and aided by those who have quite literally ‘got the T-shirt’. Banks are also happier to lend to these businesses and cash-flow, credit and bulk-deals all help in tougher times.
Companies that are ‘stronger together’ know how to market themselves during periods of austerity and band their resources. Sadly start-ups without these precious resources found the economic environment far harder.
If you are interested in franchise opportunities near you please see our Franchise Opportunities.
Is your business going to be trading, whether importing or exporting, with the rest of the world after Brexit? If so, the strength of the pound, the import and export trade deals, taxes and terms will be of importance to you. Even the strength of the dollar and the new political climate of America can have an impact.
Let us not scaremonger here, we must remember that the UK has been doing trade deals around the world very successfully for centuries before the EU even existed. Despite all our talk of austerity, the UK is one of the richest countries in the world and our position is very strong. Let us also not underestimate the trade deals our new independent position will open up, especially with emerging economies once suppressed by our EU position.
Short term weakness of the pound may result in temporary problems for some businesses, but more likely the UK will feel the impact of our own people’s response to this.
National trading will be very dependent on the public mood on spending, we may find similar patterns as that of the 2008-2009 financial crisis, where people are reluctant to move house or spend on throw-away items, but be more cautious with their cash. We must however also take into account savings rates are incredibly poor and borrowing rates very good, these measures should at least see some movement and spending across most industries. Especially when national confidence is restored.
Whether you are a business owner looking to adapt your business to best suit the environment, or are looking to invest in business during this time, we urge you to look beyond the scaremongering headlines, learn from businesses who have survived the downturns in the past and invest where you feel comfortable and secure.
As a shining example of a company that has weathered the financial storms of the recession, Just Shutters offers a fantastic opportunity for motivated individuals to invest in their own hard work and futures by becoming a Just Shutters franchisee. Whether people are moving on or staying put, people are making longer term investments in their homes, with products that add value - just like our lifetime guaranteed shutters!
Call us on 01202 233744 or fill in the form on this page for more information on our fantastic Brexit-proof franchise opportunity.