Doing business in austere times

Christine-Richard right sizeRunning a business is not easy at the best of times. To paraphrase Charles Dickens these could be rightly called “The worst of times”. On the surface it seems we are now coming out of deep recession, thankfully, but this is only part of the story.

Many small companies have gone out of business altogether and the large banks have been bailed out by us, the taxpayer. Again, the good news on RBS and Lloyds moving back in to profit is good but there is an underlying cost. Certainly RBS have been shedding staff in common with a number of other large enterprises.

This brings me to ponder on the human cost of businesses not only surviving but thriving at present. The growth of internet purchasing has hit hard at retail shops, particularly in High Streets all over the country. On the other hand we could say this is simply shifting business to accommodate the customers. I believe all successful businesses most definitely need to be very customer aware if they are to survive.

As I write this my window cleaner, who is self-employed and not young has been working round me. So I took the opportunity of asking him how well his business is doing. He thought for a moment then said “I’m doing very well, in fact I could be working all hours if I wanted to do, but there’s more to life than work”. This brings me to the increasingly popular theories on work/life balance.

Now we could argue this is inappropriate when times are hard, redundancies are widespread and just today on the news we heard that people with families earning £30,000 a year are struggling. The cost of living is rising and interest rates for savers have practically disappeared. Again, though, large supermarkets, energy providers and the online businesses I have already mentioned are making profits.

It has often been said successful businesses realise one of their greatest assets is their staff. I was one of the first people in Scotland to qualify as an Investors in People practitioner so I know from my own experience this is true. But has caring for staff been overtaking by the need to survive? The latest practice, from the staff at Buckingham Palace to medium sized companies, are not giving staff proper contracts and changing the working hours of employees to fit the demands of the business. I argue strongly this is not good economics. Although robotics is becoming increasingly used in, for example, car manufacture we still need human beings to produce good products. The recent recall of thousands of cars, many of which were made using what may have been short cuts or sub-standard parts is a further example of quality issues.

There are success stories. I have a friend who sells Ferrari cars and can hardly keep up with demand! The horse racing business, which is expensive for owners is thriving. Why? It seems people who have money at the top end are spending it rather than, for example buying stocks and bonds or putting money in to pension funds which may lose value.

I have a personal policy of using small local businesses wherever and whenever I can. This can vary from bodywork repairs, after some kind person damaged my car, to groceries and hairdressers. I should mention the local garage repaired my car for less than the cost of my insurance excess. It seems that local businesses, where people can park easily, are doing better than high streets and staying in business.

Of the large companies good employers like Centrica (Scottish Gas) are making huge profits which they say, they are putting into development. They are also paying tax on their profits. In addition they are good employers and have excellent working conditions for their staff. Other large companies who have found a way round corporation taxation could, and should, contribute properly. High levels of employment, of course, are good not only for the individuals concerned but also for the country, as PAYE makes large contributions to the public purse and, in turn reduces the cost of benefits.

Finally, I believe if we recognise all the factors I have written about and companies, public and private sector organisations work with their employees to provide first class service to their customers business can survive in austere times.

Christine Richard OBE is a regular contributor to the3rdimagazine.

2 Comments on Doing business in austere times

  1. Anne Casey // August 5, 2013 at 6:34 pm // Reply

    I like the point that you made about shopping local Christine. I think that it is important for us all to try to do this so that as many small businesses as possible make it through the recession.

  2. karen birch // August 7, 2013 at 3:33 pm // Reply

    Thanks Christine. I think that the high street downturn for most small towns is down to the out of town developments, Tesco B&Q Homebase et al, much more than on-line retailers but there is no doubt that the growth of on-line megastores, like Amazon has had an adverse effect too. I like the idea of trying to work out what actually constitutes a good company too.

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