Is your glass half full ?
Confidence, or a lack of it, plays an important part in how every business reacts to changing circumstances. It often determines whether investment goes ahead and can temper the scale of expansion plans. With every company facing some difficult questions at the moment, you can see how the whole local economy could be impacted one way or the other depending on how positive people are feeling.
In some ways the situation is encapsulated by the old adage of the glass being half full or half empty, depending on your point of view. The amount of liquid in the glass is exactly the same, but your interpretation of it will depend on your state of mind.
Trying to second guess how businesses will react is tricky. A recent quarterly survey from Business West revealed, before the former Chancellor’s mini budget, that of those who responded, only 9% of businesses had a positive outlook. When you compare that with the 32% who said they felt positive during the Covid Pandemic, you’ll get a real sense of the shuddering uncertainty that is currently gripping the business community.
But perhaps this is not the time to panic and, to misquote Private Frazer in Dad’s Army maybe “We’re not doomed !”
I can take that ever so slightly optimistic position based on conversations with our members across a range of sectors. Many of them are mature and experienced operators who have lived through difficult times in the past and who are clever and creative enough to think their way through whatever predicament is thrown at them.
More than once I have heard the phrase, “You have to work in the market you’re faced with”. And whether that means times of low interest rates and high demand or high rates and fewer customers they are putting their minds to ensuring their businesses are in the right shape to get through a turbulent period.
Take the world of professional services, for example. Members are reporting strong demand from customers for advice on legal, property and consultancy matters, to name but three. But they are not blind to future risks and are sharply conscious of the impact of ever inflating costs and what the consequences of those might be, especially if there is a long time lag between a project starting and being completed. This means they will be cautious when it comes to questions such as the right level for salaries.
There continues to be a widespread shortage of staff which could lead to a temptation to raise salaries to attract people from rivals. However, there is also the concern that by doing that they’d lock themselves into a much higher cost base which could impact on the business in the months to come. So, there is a balance to be found and quite a few of our members are sticking to their guns and refusing to be drawn into a salary war, preferring instead to make the case for consistency and working for the long term sustainable future for their business.
We’re facing a stormy period and unfortunately it will impact heavily on some, who will need extra support, but we have a business community possessed of huge experience and know-how and if anyone can navigate their way through what is to come they can.