Why Running a Business Has Been So Difficult Lately
The business world is extremely competitive. Competing companies, economic health, internal conflict, and personal goals can significantly impact business performance. Here are a few specific factors that have made running a business so difficult lately!
Uncertainty About Economic Outlook
The COVID-19 pandemic and policy responses have caused a huge increase in economic uncertainty. Increasing questions about the future is known to have a negative effect on the economy. Why? Economic decisions are made based on expected outcomes. If you cannot predict the future, individuals are less willing to make investments and gamble on projected numbers. According to Economics Observatory, stock market volatility has experienced drastic changes over the last two years. When nothing is normal, it can be extremely difficult to manage extreme uncertainty. The best thing you can do is keep your numbers consistent to avoid volatility for your company.
The Tight Labor Market
The United States has seen a record level of job openings over the last year. The difficulty for businesses to retain employees is twofold: competition with other employers due to widespread hiring and a low supply of available workers. Businesses that fail to provide adequate benefits for their employee’s risk losing them to companies that offer a more friendly environment for individuals. A loss of employees not only impacts your product fulfillment, it also has a financial impact. According to CMOE, turnover can cost up to twice an employee’s salary. Make your business a location where employees feel protected, valued, and have potential to grow. This will assist you in retaining more employees.
Inflation has been of particular concern over the last 10 years, but during the COVID-19 pandemic, supply chain issues brought inflation to an all-time high. According to Signature Analytics, the shortage of simple services and products led businesses to increase their prices and overall costs of the product. This has produced reduced purchasing power, meaning businesses are selling less and likely making lower profits. This makes it harder for businesses to reach their margins and profitability over time. The best thing a business owner can do for their company is to vary their suppliers to help mitigate scarce supplies, and adjust their service costs to reflect current inflation numbers.
The business world will always require competition and achievement. During difficult times, it is even more critical for a business to come up with creative solutions that elevate their performance. Don’t let today’s challenges inhibit your future success!
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