Marc Rosen | Head of Business Development | Investec for Business | mail me |
During tough economic times, it arguably makes sense for businesses to simply look to buckle down and ride out the storm. However, while ‘waiting it out’ may appear to be the best practice in such times, there may be a missed opportunity for business growth in a tough economy.
Hard economic times are as much a part of a business journey as periods of growth. As such, in these turbulent times a business needs to define its competitive edge, a way to ‘fight smart’. In a growth environment a business generally has less concerns over the generation of profit and can look to strive for perfection, however, in a harsher economy, often mere progression allows a company to leap-frog their competitors who are just waiting and standing still.
As such, understanding one’s customer and having the ability to change in line with their needs and requirements is critical. Furthermore, understanding the changing landscape your customer faces and being nimble enough to adapt and accommodate them makes you relevant in hard times.
PODCAST
An interview with Marc Rosen, Head of Business Development, Investec for Business, and Dr Ivor Blumenthal, CEO, ArkKonsult, discussing how businesses can have a competitive edge during tough economic times if they proactively prepare themselves for when the business cycle changes.
Preparation
Preparation is key to mitigating risk. Even the most profitable business can still fail because of cash flow challenges caused by unreasonable overheads, mismatched credit terms, slow paying clients or late invoicing for example. Businesses should work towards understanding these challenges and seek to find a financial partner who allows them to run their business most efficiently, whilst supporting their working capital needs. A business also needs to ensure that they have the right funding structure in place which allows them to access money at the right time in their working capital cycle.
It is important to acknowledge that growth doesn’t happen with the flick of a switch. It requires a long-term outlook; it requires a vision. We as South Africans are abundantly aware of volatility and a longer-term view is needed to be considered to ensure sufficient funding structures are in place to weather potential storms, but also to be able to grow when the dust settles.
Sow
As economic downturns can put pressure on the cash conversion cycle, relying on…
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Read the full article by Marc Rosen, Head of Business Development, Investec for Business, as well as a host of other topical management articles written by professionals, consultants and academics in the October/November 2019 edition of BusinessBrief.
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