Henley Business School recently identified a new breed of small British business. These companies have been named TOTs, which stands for firms that are Twelve months old, have an Optimistic outlook on business and are Technologically-minded.
The research suggests TOTs could add £360 million to the UK economy and create over 70,000 new jobs over the next 12 months.
The T-Mobile 12 Study was commissioned by the mobile communications company to investigate traits displayed by successful businesses that survive their first 12 months.
Professor Dominic Swords, from Henley Business School, shares his top tips on how small businesses can learn from the TOTs, remain optimistic during economically uncertain times and identify opportunities in challenges that may arise.
1. Think positively – all businesses face challenges but the key to dealing with these is to remain positive and turn them into an opportunity. For example, the research showed that 62% of small businesses are negotiating better deals from suppliers off the back of the tough economic climate.
2. Plan for risks – 82% of small business are developing strategies to manage potential risks and uncertainties in the future. Be realistic about the threats to a business, such as new legislation or increased competition, and plan ahead to minimise any negative impact.
3. Consider alternative funding – many small businesses have difficulties securing funding, but there are alternatives to banks. Crowdfunding, for example, is where startups pool resources from family, friends or strangers via social networks.
There is a growing community of online business angels and also social lending networks, for example Zopa, where people who have spare money can lend directly to people who need business finance.
4. Look abroad for growth – with Western Europe struggling economically, consider exporting your products or services to more stable and higher growth markets. 31% of small businesses surveyed said they are planning to export to markets that are not experiencing a downturn.
5. Focus on good leadership – during difficult times, employees will need a central figure to look to for support and direction. Motivation is central to a happy and productive workforce, so ensure senior management have a positive can-do attitude.
6. Take advantage of cheap technology – set-up free social media pages on Twitter, Facebook and LinkedIn as a cost-effective way of communicating and building two-way relationships with customers. Think about whether staff are on the move a lot and if so, consider ways to ensure they can work effectively from anywhere.
7. Be flexible – as a growing business, flexibility is essential so that a company is able to adapt to the changing conditions around it. Consider short-term contracts or leases so as not to be tied into expensive long-term agreements. Of those surveyed, 77% said they want to avoid being tied into lengthy contracts.
8. Innovate to stay ahead of competitors – during difficult economic times, many firms are wary of innovating. Take advantage of this and look at what can be done to meet customers’ needs, staying ahead of competitors.
Has your business identified an opportunity in a challenge? Do you have any tips on staying positive despite the uncertain economic climate at the moment?