When you are a small business owner it’s easy to get caught up in simply keeping things ticking over. Your day is filled with emails, meetings, customer relationships and admin tasks. Do you make time to catch up on economic news, and to keep informed about financial markets and business trends? The truth is that what’s going on globally can have a dramatic impact on your business, and your bottom line.
The state of the global economy in 2019/2020 is unclear. Brexit, European Union uncertainties, Trump’s love of tariffs and other protectionist policies, next year’s US election, as well as a slowing of both Chinese and US economic growth, all impact on us locally, affecting consumer confidence, employment, interest rates and inflation (World Economic Forum, 2019). There are also inevitable market responses to the threat of terrorism and the increased severity of natural disasters.
Every aspect of the goods you sell and the services you provide is at the mercy of these international forces. Raw material availability, supply chain reliability, labour supply, wages, worker expectations, government regulations and consumer demand are all influenced by global factors. So keeping your bottom line safe hinges on how you respond.
Deloitte, through its Chief Procurement Officer Survey (2018), note that top-class procurement is a key function for the successful management of risk, and delivery of short-term savings and business growth. The survey concludes that procurement has a pivotal role to play in increasing supply chain transparency, accessing supplier innovation, and delivering enterprise-wide cost reduction, and that in periods of economic uncertainty effective procurement is still eminently possible and desirable.
The survey identifies the following actions that market-leading businesses demonstrate to remain adaptable and proactive in a changeable business landscape:
Despite market uncertainty, and factors new and old, some things never change. Think classic economic theory of supply and demand. Your ability to negotiate prices for the materials you need, and to set the price of the goods and services you sell depends almost entirely on the level of consumer demand for your good or service.
Do you have the tools to support your business through times of change? The use of smart procurement models, such as eTrade Procurement, give your company critical flexibility and market responsiveness. By keeping tabs on changes in your specific market’s conditions as well as the global economic climate, you can better anticipate swings. By improving your company’s digital maturity, procurement can strengthen its role as a business partner within your organisation.
Leadership: Driving Innovation and Delivering Impact. The Deloitte Global Chief Procurement Officer Survey, 2018
These are the Real Threats to the Global Economy in 2019, Michael Spence, World Economic Forum