By Damian Hanson, Co-Founder & Director of CircleLoop
Recent news stories highlight that consumer inflation has raced to a 40-year high over the last year and is now running at 10.5%, more than five times the Bank of England’s 2% target. Ultimately SMEs are facing uncertain times, and it’s clear that we are in the midst of the most challenging macroeconomic environment for some time. How can adopting technology changes and making investments in cutting-edge cloud technology will help businesses navigate these turbulent times?
What to expect?
SMEs play a crucial role in the development of new markets, new job creations and global economic development. Unfortunately, startups are most affected by recessions as startup fundraising and valuations are first to fall, with less capital for investments, making it more difficult and expensive to launch or expand a business.
The difficulty is not only seen in startup SMEs. As there’s less of a reliance on funding, there is a bigger need to maintain what they already have and to withstand the pressures long enough to survive the recession. The growth of many businesses may be put on hold and business owners will need to focus on simply surviving the crisis instead with minimal losses.
Sales in some industries such as retail and consumer goods will struggle as customers tighten their belts. SMEs will need to streamline their operations to reduce costs if needed and satisfy the declining demand for goods and services.
Recession-proof your tech stack
Businesses may feel disheartened but having an innovative recession-proof plan in place may help them stand the best chance of surviving.
A good place to start is looking into your company’s software and technology stack. How your company uses it has a big impact on the cost it takes to run the business. Inefficient hardware or an overabundance of overlapping software may not seem like a huge deal in normal circumstances, but during a recession, these problems can quickly become a drain on money, time, and resources that SMEs simply don’t have. Businesses need to question whether or not there are any technologies that aren’t being used often enough to make the investment worthwhile.
Advancements in cloud computing for business now enable easy integration of common tools used day-to-day. One such example is cloud-based business phone systems that benefit sales teams thanks to their ability to integrate seamlessly with CRM tools like Hubpsot, Office 365, your cloud accounting platform and even your browser – all on one platform.
This means your sales teams gain better insights from closed deals, making it easier to repeat success, as well as increasing their efficiency and productivity at a time when it matters the most. When everything they need is in one place, time spent flicking between platforms and sharing data with colleagues is reduced to almost zero.
Stay Flexible
SMEs and startups need to be prepared to adapt. As the recession shifts the marker, what used to work for your business may no longer be effective. Companies need to acknowledge that there will be changes and look to alternative ways within their business model to service customers.
Cloud-based tools are becoming critical for creating future-proof organisations and businesses cannot afford to ignore the benefits they bring. These tools offer an abundance of data and can give you crucial insights that will allow you to grow your business once the recession passes.
Investing in marketing during a recession is also important, during the 2008 recession many companies paused marketing plans dramatically. Research has found that businesses that continued their marketing strategy emerged stronger post recession outperforming the market average by more than 30%.
It is not impossible for SMEs to come out stronger post-recession and those that do emerge will have learnt lessons making their company stronger. Adopting a new mentality and new technology will serve your business far better than over or underreacting to what lies ahead.
Uma Rajagopal has been managing the posting of content for multiple platforms since 2021, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune. Her role ensures that content is published accurately and efficiently across these diverse publications.