In times of economic crisis, small businesses can suffer irrecoverably. This session explored how to not only sustain, but grow your business in financially challenging times, and how the effective use of a good support ecosystem can be your superpower.
- Naomi Nash, Head of Community & Collaboration – Birmingham Tech
- Tom Haworth, Founder CEO at B13 Technology
- Mike Lattimer, Managing Director – SF Technology & SF Recruitment
- Jenny Miller, Untapped Pricing
- Davies Okeowo, GBSLEP Growth Hub
Naomi Nash opened the session by asking the panel to discuss, given that the World Bank has forecast for a period of weak growth and with higher energy prices reducing real income and increasing production costs, how can businesses manage to sustain and grow?
Mike Lattimer noted that the one thing that is certain is that things are changing, and we have to get used to change. But that there is also opportunity for growth. His suggestion is to look closely at your clients, and get embedded with the right kind of businesses, for example those that are scaling.
Tom Haworth agreed that a recession can be scary, but that it also creates a lot of opportunity. And if businesses can identify and take advantage of the opportunities then they can not only come out stronger, but also get an edge on weaker competitors. He also sees an opportunity for businesses to increase productivity, especially if businesses can take advantage of changes in technology. He used the example of generative Artificial Intelligence (AI), which will create the need for experts, augmenting skills rather than replacing jobs.
Davies Okeowo explained that it’s also dependent on the stage of your business and industry. That a crisis can be good or bad depending on where you are as a business. For him, the important thing is that you need to be mindful and pay attention to the funding and tech that is available. He emphasised that business owners need to think about what are the good things that can be leveraged, and what are the bad things that need avoiding.
Jenny Miller suggested some points on how to deal with price rises in relation to customers. She noted that it’s important to not bury your head in sand. If your costs are going up but your prices are not, then that will have an influence on the health of your business. So, it’s always helpful to review your pricing, as it’s an important lever that can be used tactically. And moving the needle on profitability and retention is a great opportunity to find the truth about your customers. She suggested three tips for pricing:
- Don’t make assumptions. Don’t assume that things are playing out the same for your customers. Understand your customers and their ability to pay – don’t guess.
- Understanding value. Value is not an inherent property; it exists in the eye of your customer. Value and willingness to pay are subjective. Talk to customers, understand what your tangible and intangible benefits are, and the alternatives from competitors.
- Communicating price changes. Avoid using long over-justifications. Be clear, concise, and unapologetic. If you’re not clear it might show that you’re not sure.
Tom noted that price increases are generally not the first thing they do. And suggested instead looking at an increase in value, for example working out some innovation in line with your service. Or looking at other ways of managing increase, like maximising productivity.
Naomi followed with a statement on how reports have placed unemployment as the third largest cause of anxiety after war and economy. She asked the panel if businesses can cut costs without cutting staff?
Tom suggested that business as usual doesn’t work in a downturn, and that it is beneficial to be first movers in this environment. So as a business owner you should give yourself time to look at the market and opportunities, but also to look at a combination of approaches such as of looking at operational costs, bespoke services, investing in research and development, and how to integrate tech for greater efficiencies.
Staying on the topic of Artificial Intelligence, Naomi asked the panel if they had any tips for businesses that are thinking about AI?
Tom noted that AI will eventually be incorporated into all industries, so it is essential to look for a tech partner. And it is also important to understand what data you already have and how can it be structured. Davies explained that above all this is a time to relearn. And the first step is to educate yourself. But don’t only look from the lens of tech, open your mind but be mindful of what you already know about your business.
The conversation moved on to new technologies and redundancies, and if it is better to keep staff and retrain, or to hire?
Mike gave his perspectives as both an owner and recruiter. He noted that he always talks to clients about training, as it improves retention and makes it easier to attract the best people. He suggested that if you spend more time on how to retain, it makes it both easier to retain and easier to recruit. He shared some strategies that don’t cost money:
- Understand what your purpose is and run low-cost campaigns to build your brand, and help attract & retrain
- Being clear what is your policy for a hybrid/ flexible way of working
- Internal mentoring, which can create impact and increases productivity
- Allocating time for people to train, not necessarily paying but giving time
In his view we are now seeing a softening of salary expectations in the market, which has rebalanced the market and made it more reasonable. But pay does have to be at least at market rates.
From the perspective of the support ecosystem, Davies noted that these are interesting times as, while some pots of money from public funding are coming to an end, the number of businesses has increased. And that even when new pockets of funds come through there will be a delay.
For him, now is the time to innovate in business models and process. To think how do you reinvent your business model, how to be more efficient using tech? He emphasised that there are still some funding options like the British Business Bank and Innovate UK funding, but not as much as it used to be.
Questions from the audience.
What advice do you have for the first step for someone that has an idea for a business?
Davies noted that as there is a massive increase in the number of startups, it is important to make sure that there is a market and a gap. That it is no longer enough to have an idea, you need to be able to see a quick path to monetisation. Also, there is still a lot of free support around there, so look within the ecosystem.
Tom suggested to speak to experts as soon as possible, as you will make mistakes which in the end will be more expensive than speaking to an expert. Jenny proposed building experiments that are quick to run and help you find out if people are ready to pay for your product. And Mike concluded that if you can get your business started in this condition, then there is a good chance you will survive. Furthermore, there is never a right time, so go for it.
How do you plan to use AI in the future?
Tom noted they are already using it extensively for suggesting code. He also emphasised that, at the moment, software developers will take advantage first, but once other business owners start using it, then we will we see a steep change. Jenny said that they use it to do marketing copy, and to synthesise transcripts from market research. They are also trying it for more creative tasks like prototyping ideas for businesses.
Tom explained that you do need to have the expertise to ask right questions and to moderate the answers. And Davies noted that you need to also think from a producer’s perspective, not only what products can you create, but how to make business better.
You can access speaker slides here.
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