Why optimism can be a firm’s most crucial asset during the cost-of-living crisis - Mel Hird

Headlines make for some bleak reading at the moment.

The challenges of the energy crisis and inflation touch businesses and individuals alike.

Data for July from the ONS showed that inflation hit 10.1 per cent, which is only the fourth time in 70 years that inflation has hit double figures.

It means that businesses will struggle to keep up with rising costs, and consumers will have less money in their pockets.

It can sound trite, but Yorkshire has always been famous for its grit in the face of adversity. The ability to look at adversity and push on.

It’s a quality that will be key over the next few months.

For entrepreneurs, opportunities are everywhere, in the good times and bad.

Winston Churchill once said: “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”

It’s an approach that has driven my approach to life and business and a value that sits at the heart of my business.

Optimism can be in short supply at times, but it can be the most significant asset for any business.

Being optimistic entails accepting any obstacles that may arise and viewing them as manageable because they are just transient bumps in the road to achievement.

It involves cultivating a positive outlook and a can-do mentality.

There is a lot of news about which businesspeople should exercise caution.

Every businessperson can take steps to prepare a business to take advantage of opportunities as they arise.

Knowing that the company is well-placed to move quickly will reinforce optimism and create a culture that seeks out chances to make positive changes.

Over time, every business will build up unnecessary overheads that are required for the efficient running of the company.

These may range from surplus pool cars to under-utilised offices or sponsorships. So take some time as a team to look at every line of the P&L to identify cost savings that can free up cash.

Find a funding partner that has taken the time to get under the skin of your business and understands your values and goals. They will be well placed to move quickly to support your business should opportunities arise that require additional resources.

Think about taking your existing products or services to new markets and developing new products that diversify your offering. Putting all your eggs in one basket during a recession can be problematic. It’s a good idea to think creatively about how to develop new revenue streams.

While cutting out the unnecessary is essential, so is creation. Take time to record tasks that your department or company undertakes and put in place processes that complete them more efficiently. Monitoring helps you identify areas where you may be even more effective and gives you the data and power to make changes.

Being busy and being productive are not always correlated. Everyone knows someone who is always busy but never seems to get anything done. Where attention travels, energy flows, so it’s critical to keep your staff members concentrated on just one task or objective at once. Prioritise clearly, and efficiency will follow.

Technology and digital transformation are important tools to drive cost efficiencies while increasing productivity. Automation technology should be used carefully to support well-trained employees to be more effective and often happier in their roles.

Trust is essential in tough times. Think about how to build trust with employees and the wider supply chain. When people know you have their backs, they are more likely to be there when you need help.

Every market has its opportunities, and there are always companies that thrive in tough times.

However, more often than not, they are the ones who seek to do more than survive.

Mel Hird is a founder and director of Fresh Thinking Capital.