The business landscape has changed dramatically recently. On top of the impacts of Brexit and Covid, we’ve since seen other rapid changes that have impacted business performance in the UK.
Companies have needed to respond quickly to handle pressures like energy surcharges, a collapsing pound and rising inflation. Having an agile system can help your business to adapt to these and similar rapid changes. Here’s how.
Adjusting Your Pricing
Due to inflationary pressures, many businesses have had to increase their prices. But doing this across the board can alienate customers, and with the cost of living crisis beginning to hit hard, companies have instead been vying for custom by offering new pricing models.
To adjust your prices to cope with economic pressures needs a system that can quickly and easily implement such changes. Perhaps you want to introduce new volume discount pricing, implementing new pricing tiers or discounts. Or you may need to apply special pricing for customers in certain categories.
Or you may need to track supplier costs to ensure that you have enough profit built into your prices. All of this requires changes and reporting that an agile system can comfortably handle.
Accurate Demand Forecasting
Most businesses are seeing significant reductions in the demand for their products and services. With inflation running at a 40-year high, customers are curbing their expenditure, especially when it comes to luxury goods and non-essential items.
This restraint in customer spending has meant businesses have had to pay closer attention to their sales forecasts. They have had to more frequently visit their sales models to ensure better accuracy and to have close oversight of their own spending with suppliers or on raw materials.
With an agile system, your forecasts are better. You can assess the trends in demand and plan your buying or production accordingly.
Managing Currency Fluctuations
If you sell internationally, you will have been affected by recent currency fluctuations – especially the crash in value of the pound after the September 2022 mini-budget.
Although markets rallied after the reversal of the budget, any depreciation in the value of the pound against the Euro or the US dollar, for example, makes British goods are more expensive for international customers in America and Europe.
Reacting to currency fluctuations like this is easier with a flexible system that handles multiple currencies and allows you to set exchange rates for your transactions.
Supporting a Hybrid Workforce
The pandemic saw a very rapid change in the way we work with large numbers working from home. Even now, hybrid and home working is still popular, and in September 2022, 37% reported that they had spent some time working from home during the prior week.
A flexible, agile system that is truly cloud-based can support your hybrid and remote workers. With just an internet connection and a laptop, tablet, computer or smartphone, they can access the same system that your office workers use. There’s no need for specially configured devices or even business computers.
Protecting and Maximising Cash Flow
The economic downturn, inflationary pressures and surging energy prices may continue for some time.
The Energy Bill Relief Scheme announced recently by the government will help many businesses that are not on fixed price energy deals. But there are no guarantees that it will be extended beyond the six months.
With this in mind, protecting and maximising your cash flow is of the utmost importance. An agile system will help you to run cash flow projections and evaluations of the working capital your business will need in the coming months.
To improve cash flow and free up working capital, you will need to take measures to both limit expenditure and ensure swift payment from your debtors.
To maximise your access to working capital, you may want to implement new payment practices. If your system is agile enough, you can consider changing payment terms, taking deposits at point of order, or introducing incentives for those that pay early.
Changing or Implementing New Business Models
If your income is affected due to a reduced demand, you may seek to shift your sales focus.
For companies whose attention has previously mainly been on acquisition, then increasing the emphasis on retention strategies may help. Keeping customers is known to cost less than acquiring new ones. Here, one way of encouraging customers to stay with you might be to implement a new business model.
Subscription methods of payment spread a customer’s liabilities more evenly, which may help retain those that cannot afford to pay for your services in lump sums.
And if you provide goods rather than services, then through the servitisation of your products, you can add value to your offering and move from a transaction-based model to a subscription model.
With an agile system that can handle differing sales models and payment methods, even for the same products, implementing a subscription method is simple and will also help you to better predict your ongoing and long-term income.
Enabling Better Leadership
With the current economic turbulence, you need to lead your company by knowing what needs to be done and how to accomplish it. Using an agile system will help you to be sure that you and your leadership team to understand the best options for your business.
By examining possibilities and creating different financial models, you can focus on adjusting to these rapid changes so that your business can get through them.
You may need to rethink your objectives or consider a complete change of direction for the business. And with a comprehensive action plan, you can successfully lead your company through these changes.
NetSuite: Agility and Flexibility to Handle Rapid Business Change
NetSuite ERP gives you the business agility and flexibility you need. It is cloud-based, so can be accessed from anywhere that has an internet connection. You can change your business model overnight, adding new sales channels or payment methods. With real-time business intelligence, your leadership team can make better business decisions and react with speed and flexibility.
For more information on NetSuite, contact us today.