Why do businesses fail?
Greater Birmingham Chambers of Commerce
According to ONS data, 27% of businesses founded in 2015 had ceased trading within two years. In 2017 alone, 26,280 enterprises closed their doors.
But why is it that some businesses fail when others succeed? And what can you do to make sure your company is as fit and healthy as possible?
We are launching the Greater Birmingham Chambers of Commerce’s Business Adaptability & Resilience campaign to help local employers with that very conundrum.
Throughout September 2019 we will be giving a platform to our Chamber members to share their experiences, advice and insight into how firms can manage risk and be agile and responsive to change.
We will be promoting new videos, blog posts and podcasts on our social media channels each week so don’t forget to follow @GrBhamChambers and get involved using the hashtag #RTB19.
Raise the BAR is sponsored by Western Union, a leading player in FX risk management and global payment solutions.
The campaign was proposed by our Chamber Council, individuals elected by Chamber members to represent their views on Chamber policy & campaign priorities. And it is easy to see why given the myriad of ways in which employers are facing uncertainty:
The Business Fundamentals:
During the first week of Raise the BAR we are going to be exploring some business fundamentals:
Risk management: From competition to data breaches, Brexit to skills shortages every business faces risks that have the potential to negatively impact their business. Yet according to McKinsey the worlds leading global companies only spend and average of 9% of their time in board meetings discussing risk management.
Financial management: As the well known saying goes “cash is king” and maintaining a healthy cash flow position is critical to business resilience. However, our Q2 2019 Quarterly Business Report survey showed that nearly a quarter of local firms had seen their cash flow position worsen over the last three months.
Data & Insight: Having access to the right market data and management information is critical in order for businesses to successfully deliver their business plan. Yet according to PwC’s PwC’s 22nd Annual CEOs Survey 87% of CEOs think it’s critical or important to have data about the risks to which the business is exposed to make long term business decisions. But only 22% think they have comprehensive data on it.
Look out for Raise the BAR content exploring processes for managing risk, improving information flows and improving your finances between the 2nd and 6th September.
- Adaptability and Resilience: A Hospice Perspective, Emma Hodges, Group CEO, St Giles Hospice
- Why Do Businesses Fail?, Henrietta Brealey, Director of Policy & Strategic Relationships, Greater Birmingham Chambers of Commerce
- How Collaboration Strengthens Business Resilience, Professor Julian Beer, Deputy Vice Chancellor, Birmingham City University
- Responding to Uncertainty: A Business Checklist, Richard Holland, Owner & Director, Inergo
- Building Business Resilience with Prompt Payment , James Blackman, President, Lichfield & Tamworth Chamber of Commerce
- How We Improved Our Financial Resilience with R&D Tax Credits: Helen Bates, CFO, Greater Birmingham Chambers of Commerce
- An Introduction to Managing Financial Risk , Jonathan Dudley, Midlands Managing Partner, Crowe UK
Technology:
There are few businesses out there that do not have cyber security or data breeches up on their risk register. The UK Government reports that 32% of business identified cyber attacks or breaches within the last 12 months, costing an average of £4,180 per year per affected business.
Yet investment in technology is an important part of many businesses’ growth strategies. According to PwC’s 22nd Annual CEOs Survey, over half of CEOs agree (38%) or strongly agree (18%) that Artificial Intelligence (AI) will have a bigger impact on the world than the internet. This time last year, we surveyed over 200 local businesses. Only 8% had invested in Machine Learning/AI over the past 12 months.
The same survey also revealed that 77% of local businesses believe that investing in technology & machinery is important (32%) or very important (45%) for enabling business growth. However, only 57% reported that it was an important (28%) or very important (29%) part of their business plan.
Look out for Raise the BAR content exploring managing risks and investing in innovation on technology between the 9th and 13th September:
- Investing in the Environment: Biogas Bus Trial: Ali Bell, Head of external communications (UK Bus, National Express
- Disrupt or Be Disrupted: SmartDelivery : Clare Francis, Head of Brexit Advisory, Pinsent Masons
- GDPR: Myths & Mistakes One Year On: Clare Perrett, Customer Data Manager, Wesleyan
- Ransomware: How to prepare & respond: Dave Loewy, Group Information Security Manager, Wesleyan
- Business Growth Needs Innovation and Systems: Steven Timberlake, Account Director, ioSTUDIOS
- Adapting Employee Benefits to Suit the Modern Workforce: Brian Hall, Chief Commercial Officer, BHSF
Going Global:
HMRC data shows that businesses that trade internationally are approximately 20% more productive that those that don’t.
According our Birmingham Economic Review 2018, in 2017 14,863 businesses (including branches of multibranch businesses) in the West Midlands region were exporters.
However, HMRC Regional Trade Statistics for 2018 showed that 63% of goods imported into the West Midlands come from - and 45% of goods exported out go to - the European Union. Our Brexit Report for August showed 29% of services firms in the sample exported services to the EU.
As we all know, with Brexit on the horizon, the conditions under which UK firms are trading internationally are somewhat changeable. In August 2019, the value of the pound hit its lowest level in a decade. The latest Western Union FX Barometer shows that for 34% of all companies their biggest FX challenge is ‘market volatility/timing trades’.
Look our for Raise the BAR content exploring how firms can manage risks and innovate to find ongoing success in the global marketplace between the 16th and 20th September:
- Business Adaptability & Resilience in the Global Marketplace (podcast): Christina Wadlow, Western Union & Henrietta Brealey GBCC
- Just how complicated is it dealing with companies overseas? Christina Wadlow, Head of Partnerships, Western Union
- Is it Possible to be Ready for Brexit? Henrietta Brealey, GBCC
- Adapting to Brexit: Carl Hollier, Managing Director, Industrial Washing Machines Ltd
- Payments Take to the Football Field: Christina Wadlow, Head of Partnerships, Western Union
- FX Volatility- The Bottom Line : Christina Wadlow, Head of Partnerships, Western Union
People & Leadership:
So you’ve identified what needs to change in order for your organisation to adapt and become more resilient, how do you make it happen? According to McKinsey, the factor most likely to influence the outcome of a major change project is “clear, organisation wide ownership of and commitment to change across all levels of the organisation”.
Being adaptable as a business requires change – be it in the form of embedding new systems and processes or shifting your entire business model. People are at the heart of every business and the key to any successful transformation.
However, Curium Solutions found that among staff in organisations implementing major change two-thirds doubt their organisation’s ability to communicate change effectively and less than one third think their organisation has an effective change management team.
The way workforces want to work is also. CIPD report that in 2017, 27% of employees had one of a set of specified flexible working arrangements, up from 23% in 2012. In a labour market experiencing record employment rates, attracting and retaining talent is key for business resilience.
Look out for Raise the BAR content exploring how businesses can engage their people in effectively delivering change and keep up to date with modern working preferences in our final week of the campaign; 23rd to 27th September:
- Getting Fit for the Future: Implementing Change at Midland Heart: Joe Reeves, Executive Director for Strategy and Growth, Midland Heart
- Leading Change: Andy Dawson, Director & Co-Founder, Curium Solutions
- Investing in Our People: Happy Hospitality: Doug Wright DL, MD, Wright Restaurants Ltd
- Top tips to achieve highly productive change: Fiona Anderson, CIPD Birmingham Committee
- The Business Wisdom that some Leaders ignore but shouldn't: Ruth Gawthorpe, CEO, Smart Working Revolution
- Responding Challenges in the Automotive Sector: Richard Hill, Head of Automotive and Manufacturing Sector, NatWest
Find out more here and don’t forget to keep an eye on ChamberLink Daily and #RTB19 on Twitter and LinkedIn for the latest content.
Henrietta Brealey
Director of Policy & Strategic Relationships
Greater Birmingham Chambers of Commerce