Our latest Vistage Confidence Index showed that 76% of CEOs expect economic conditions to improve during the next 12 months. Revenue growth expectations have doubled from that of 12 months ago. Plus, planned investment by SMEs has climbed significantly above levels shown 12 months earlier.
Andrew Brent, Founding Partner of Think Again Growth, agrees that all signs point to the second half of 2021 being a markedly better period for businesses.
“It’s certainly true that most consumers - and businesses - have got a degree of money stored up that they haven’t spent. So the expectation is that there will be more spending in the second half of the year.”
Spending more following a difficult time is a very human response, Andrew explains.
“When you’ve been through a period of difficulty, there’s a strong psychological need for positive experiences – give me some joy, let me go on holiday, to the pub or buy new clothes. And that translates into more spending.”
We’ve seen this response before, in the face of two world wars that were followed by real “periods of fun and expansion.”
“We can see that the market is ready to get out there and spend a bit of money, and businesses should be gearing up for that.”
How to prepare for growth
Keep a level head
Of course, there are a number of factors that could potentially inhibit this predicted growth. Further coronavirus variants could impact people’s health, and associated lockdowns could impact their financial health.
“The number one risk is that as the furlough ends in September a lot of people will become unemployed, or that businesses that were successful before the pandemic will just run out of cash,” Andrew explains. “There is a risk of unemployment, and the government may be able to mitigate that, but there will come a point where they take the support away.”
“The second possible risk is inflation. If inflation begins and the government compensates by putting up interest rates - or the Bank of England does - that will be a dampener as well.”
“Overall though, if I was betting, I’d bet on this being a period of expansion. My personal view is that we’ll have a very good 18 months from now until the end of 2022.”
Andrew believes there are three key ways leaders can prepare for the new growth cycle.
Find out how other leaders are feeling about the rest of 2021 in the Vistage Confidence Index.
Differentiate your business
A competitive, busy market means increased competition for businesses. And it goes without saying that the most successful businesses are those who recognise the need to stand out from the crowd.
One of these challenges is increased competition. As Andrew explains, the most successful businesses will be the ones who recognise the importance of standing out from the crowd:
“Everybody’s going to be competing so you’ve got to stand out. Differentiation Is key. You have to be really clear about what you do that’s different from others.”
Andrew explains that while this requires work, it should be viewed as a golden opportunity to clarify and focus on your USP.
“Many businesses forget this over time – they get dragged into being versions of everybody else. This is an opportunity to get back to what you’re great at, reinforce it, and differentiate yourself in the market.”
Target the right customers
Although targeting the right customers is always fundamental to business success, in a period of growth, it becomes even more crucial. Focusing your efforts on a specific target market could make all the difference.
“You need to be very discerning about which customers are your main target,” Andrew explains. “A lot of businesses try to sell to everybody.”
“At this time, if you can focus your commercial resources on your highest potential opportunities, that will make you very efficient. When everybody's out there competing for growth, you want to be super efficient at really targeting the customers that you can win.”
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Don’t forget the joy
When you understand your audience and what they’re looking for, you may be able to give them something which is overlooked by your competitors.
Andrew explains why it’s so important to connect with your customers in this way and give them more than what they’re literally buying.
“Try to connect emotionally. Try to remember that people want a positive feeling, they want a little bit of joy. If you present what you're doing in a positive, joyful way, people will respond to that because we've all been locked down for so long. There’s a real need for the sort of business that puts a positive emotional spin on what they do.”
After such a tumultuous period, the prospect of increased confidence and a new growth cycle is exactly what businesses need. While Andrew is clear that he believes the next 18 months will be a time of expansion, he’s also clear that how well you do depends on how prepared you are, and quickly you can adapt.
“If you can focus and tick those three boxes (differentiation, target customers and emotional connection), your chances of growing quickly and profitably are much greater.”
Get help preparing for a period of growth for your business by joining Vistage today.
Image: By robert via Adobe Stock