It appears this is a nationwide trend, as a recent report from O2 Business and CEBR has found that small businesses are experiencing their most volatile retail sales in a decade.
Annual swings in household spending have been a key driver in changing sales, with consumer spending at its highest point since financial crisis. As the average person now has more disposable income, we’re increasingly splashing out on “discretional” items, like food and recreation.
Whilst this is great news for UK small businesses, reports have found independent retailers are struggling to keep up with demand. Reasons for this include 43 per cent having insufficient physical capacity, 29 per cent saying that peaks in demand experienced were unexpected, and 12 per cent identifying key staff members leaving the company as the reason for feeling overwhelmed.
Colm Sheehy, senior economist at the CEBR said: “Now, more than ever, small business owners face a plethora of tough challenges: from sudden changes in spending patterns, to unpredictable weather and staff turnover. The economic recovery has boosted customer confidence, but small businesses need to ensure they are agile enough to adjust to the resulting sharp peaks and troughs in spending.”
So what are the best ways to keep pace with the surprise peaks and troughs that are part of the daily routine for those running a small business?
- Avoid purchasing expensive technology that you may not need. Technology available for SMEs is now available on a “pick and mix” basis, letting you choose what apps and cloud services you need for your business
- Make sure you have a scalable workforce that can fit around seasonal demands in your business. Keeping part of your workforce on freelance contracts means you can hire quickly if unexpected demand comes in, but scale things down when times are tight. However it’s important to retain at least some staff on a permanent basis that have a good understanding of the business and are reliable
- Cash flow is one of the major challenges for small businesses – it’s important to keep a close eye on your loans and debts to make sure you don’t become unstuck when times are slower
- Plan ahead. You can’t always predict when you’ll see spikes in demand, but having insight into customer data can help you make an educated guess. Market analysis and social tools are a good way of understanding customer response to your product
Ben Dowd, O2’s business director said: “Running a small business is always highly unpredictable and the findings from our research show that this continues to be the case. Sales volatility and unexpected changes in the market place present both opportunities and challenges.
“At O2 we want to help more business owners supercharge their business by putting digital at the heart of what they do, whilst offering a service that is as flexible and nimble as their business. We have seen first-hand from our customers how the right technology can help any company work smarter, faster and more efficiently.”
What is Business Essentials from O2?
Once a Business Essentials customer has paid off their loan on their phone or tablet, they only pay for their monthly airtime, considerably reducing their bill. This sets Business Essentials from O2 apart from other networks’ tariffs which continue to charge for both the device and airtime even after the minimum contract period has finished.
In celebrating the launch of Business Essentials, O2 Business has partnered with Real Business to provide one lucky reader with two tickets to see England vs France on 15 August at Twickenham. All you have to do is let us know your biggest business challenge though a simple tweet.
Recognising that no two small businesses are the same, Business Essentials has been designed to help customers respond to their changing business needs. Whether it’s the need for the latest device, a tailored data plan or new business apps, the scalable tariff makes it even easier for business owners to put digital technology at the heart of what they do.
In addition, Business Essentials offers unlimited calls and texts on most tariffs – business owners simply decide how much data they need from one month to the next, with the option of paying for their devices upfront to reduce monthly spend, or spread the cost with a 0 per cent APR loan over 24 months.
Full terms apply, see the conditions page.
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