How have budget, change of monarch, and prime minister affected your business
The last couple of months have brought many changes and uncertainty. Her majesty’s passing, Boris Johnson’s resignation, in addition to an ongoing war have impacted the people and businesses of the UK.
Here at Sayers Solutions, we have decided to analyse these external influences and what exactly they mean towards your business using a PEST analysis.
Also known as PESTEL, PEST is a simple and commonly practiced tool which enables you to assess the political, economic, social and technological developments affecting your business’s setting.
Many of us will remember putting the PEST analysis into practice back when we were in school, so we apologise if this stirs up feelings of unfortunate (or fortunate!) nostalgia.
But the PEST tool is in fact something that is most beneficial for your business, aiding you into better comprehending the ‘big picture’ factors of change you are exposed to and as a result, make the most of the opportunities they bring.
Starting with the political factors, governments hold the power to change laws & policies. They can also increase or decrease tax. Raising value added tax on goods can affect revenue. If VAT rates are increased, the business will have to raise their selling prices which could consequently result in lower sales, etc.
The monarch is known to avoid politics. This is one of the tenets of the contemporary British constitution which is most acknowledged. Even though the crown possesses enormous power, it is understood that it can only use that power in conformity with the recommendations and preferences of the government.
Political factors affecting businesses include employment and health and safety laws.
Most of their decisions will have direct impacts upon your business, owners are advised to stay up to date with both local and international political outcomes as they are always unpredictable.
Next up we have economic factors– the most prevalent economic factor in the UK today is the cost-of-living crisis which is caused by inflation rising faster than people’s wages.
Due to rising costs, escalating demand, and a lack of supply, prices are only going to keep rising.
The elected prime minister Liz Truss vowed to be ‘hands on’ with Britain’s current energy crisis and revealed to cap the cost of energy bills, whilst the Bank of England delays making a decision on raising interest rates to fight inflation.
Since her resignation, new prime minister Rishi Sunak has vowed to find up to £10b to help people from poorer households combat the cost of living crisis.
Interest rates, exchange rates and recession all affect purchasing attitudes of consumers.
Another factor is the ongoing war in Ukraine. Ukraine is a significant supplier of agricultural products like grains and oil, and any disruption in this supply will increase the price of food globally, meaning that people have significantly less money to spend on other things apart from essentials.
Considering this, it may be wise to adjust your business budget, or to think about making some changes such as raising your prices, terminating third-party contracts (do you really need a photographer for PR?), or offer a subscription-based pricing model.
The government also announced the raise of employment allowance by £1,000 a month. Small businesses would then be allowed to deduct up to £5,000 from their employer national insurance contributions obligations as a result of the reform.
As for social factors, the popularity of social media and technological advances have resulted in incredibly fast information retrieval, supporting the fact that we currently live in the most fast changing era of all time.
Technology and social media platforms such as Instagram and Tik Tok are favoured by the younger demographic, causing them to absorb short bursts of information and then move on to the next best thing.
The younger consumers also prefer to shop online as opposed to the older generation who favour more traditional methods.
The effect of a changes to social factors can impact your business in many ways therefore cultural shifts, market research & trend patterns should always be analysed to stay on top/ be one step ahead.
If you run a small business owner, you are probably thinking that technology is not a big factor which can directly affect your business.
Depending on what you provide/sell, technology will often provide you a way of doing that in a much more efficient way.
If you work from home as a consultant, then you would likely need great internet speed and connectivity.
If you sell homemade baby toys, then you probably need an easy-to-navigate website & a mobile payment system.
If there is anything that takes a lot of your time & effort, it can most likely be replaced by a machine- reducing the cost of labour and saving time.
Technological factors are some of the many external factors that must be considered in order to be efficient and effective within your business.
We hope that we have provided some useful knowledge & things to consider (if you haven’t already) regarding today’s rapidly changing and uncertain times.
If you would like to examine the external influences of your business and the environment in which it sits, the PEST analysis is a useful tool to use.
If you use a reMarkable (or other electronic notepad) you might find our PEST template available on our Etsy shop useful.
Please get in touch with us if you’d like to discuss your business, goals and challenges. We have a number of sessions available, including Suggestion Session for new contacts.
Suggestion Sessions are free 15 minute meetings where we will talk about your business, the challenges you face and the goals you want to work towards. Giving you insight and experience of working with us, so you can consider how it might be beneficial for you and help you achieve your goals.
We also offer peer support sessions, as well as one-to-one consultation and coaching sessions, which can result in us doing some of the implementation on your behalf – if that’s what you choose.
Whilst our primary aim is to empower and motivate you – we understand that the one thing most small businesses lack is time, and delegation of the tasks they don’t need to do, is the challenge that many face. Sayers Solutions is here to help you focus on what you do best.
Here at Sayers Solutions we believe on working on your business is as important as working in it! Investing time on your business should help you generate more of what you want to achieve.