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Businesses turning gloom into good news
While we always aim to keep a balanced view of economic conditions, there's no denying that there is a lot of bad news around - or that trading conditions are tough. This is especially true for business selling directly to consumers. The forecasters are agreed that the challenges are likely to continue for some time to come. But we've noticed some innovative approaches to surviving and thriving in the downturn that we'd like to share.

New product ranges

We've seen some of our clients expand their product ranges - or in one case - completely change what they sell. This is a clever response in a time where consumers are looking to mend and make do. A shift from selling new items to second hand ones, the introduction of parts for repair or renovation have proved to be successful strategies.

Cheaper alternatives

With falling demand, one client has sourced lower quality products to offer customers an alternative, helping their customers to reduce costs whilst keeping the business. We've also seen an adaptation of this in the service industry with service packages being slimmed down and tailored to client budgets - all helping to keep relationships win-win.

Strategic partnerships

We've also noticed increased collaboration between small businesses in related industries amongst our clients, with previously direct-to-consumer businesses seeking out and securing sub-contract work as companies struggle to manage with reduced employee numbers. While it often requires a degree of humility to ask for the work (and often a reduction in rate), this approach has seen some small traders keep going, unlike others who have stuck to their old business model.

Complete structural change

By far the most radical strategy we've seen recently is complete structural change by franchising off part of the business. This change not only resulted in a reduced working capital requirement (along with the ability to grow the business without further financing), but also led to increased tax efficiencies too! Sometimes reduced turnover can create opportunities as well as challenges. Now might be a good time to review your own company to see if a different structure could improve your business situation.

Looking ahead

Here's the good news. Whilst conditions are likely to stay challenging for some time yet, if you're still in business, you're doing well! Now is the ideal time to make sure you have an updated budget and sound business plan for the coming year - and to see whether you could adapt any of the strategies outlined above to secure your business for the future. We'd be happy to help. Please get in touch on 0115 871 5842 or by email at: info@belsoftstrategic.co.uk
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Our details

Belsoft Strategic Accounting
Mercury House, Shipstones Business Centre
Northgate, Nottingham, NG7 7FN

Telephone: 0115 871 5842
Email: info@belsoftstrategic.co.uk
Web: www.belsoftstrategic.co.uk