So, the Budget has come and gone – and it’s probably right to extend a word of sympathy to all my IFA friends: it looks like they’ll need to forget everything they ever knew about pensions and start again…
While George Osborne was on his feet that nice Mr Putin was quietly going about his business, hoovering up the Crimea and checking when his tanks would be free to roll into the eastern Ukraine.
But ‘so what?’ you rightly ask. You’re running a business in North Yorkshire, the budget isn’t going to impact on you very much, you’re a seriously long way from the Ukraine and you’ve enough to worry about with your key person off sick, the suppliers failing to deliver and your customers not understanding the connection between an invoice and a transfer to your bank.
I’m not so sure.
I was chatting to a group of businessmen the other day: someone mentioned a SWOT analysis and we all nodded at an old friend. “How many of you use a PEST analysis as a tool?” I asked. Not only was there a general shaking of heads, there were two or three puzzled expressions.
If you’ve not come across a PEST analysis before the letters stand for the outside factors that could impact on your business: Political, Economic, Social and Technological.
Well, the political was certainly in evidence on Wednesday, and not just for IFAs. We’ve a general election in little more than a year and the Budget was George Osborne’s opening shot (for the Tory leadership as well, some might say…) But right now Labour are favourites to win in May 2015 – how would that impact on your business? Would they continue with the cuts, or would a Labour government lead to more public spending? And if it did, could you benefit?
What would a change of Government mean for economic policy? Would we see a continuation of low interest rates? Inflation relatively well under control? If you’re looking at borrowing for your business, is it worth doing it now and fixing at a low rate? And what about the wider economic and political picture? If Mr Putin’s tanks do roll onto the lawns of Kiev, what impact would a protracted period of sanctions and a new Cold War have on your business?
Social factors in a PEST analysis include an ageing population, how education policies might impact on available staff, how changes in social trends will affect the demands for your products and so on.
…And you don’t need me to tell you how technology is changing our lives. As someone said to me the other day, “I went to see my mother. She was wandering round the kitchen doing her Tesco shop on her iPad. I’d never have believed it…” And at the other end of the age scale, study the behaviour of some of the most valuable business consultants you can talk to. They’re expensive and they don’t always give you the answer you want, but they’re the best window into the future that there is. I refer, of course, to your children. As my boys so readily point out to me, once you’ve excluded the simple pleasures of kicking a ball, if it can’t be done online it can’t be done at all.
For me, a PEST analysis only needs doing once a year – but it does need doing. So when you take yourself away to that 5* hotel to plan your business strategy for next year, add a PEST analysis to your list. (If you really want to show off, add Legal and Environmental to make a PESTLE analysis.)
As Harold Macmillan reminded us, “events, dear boy, events” are always happening. This time last year the UK was teetering on the brink of a triple dip recession: today we’re growing faster than nearly all our major competitors. This time next year the Ukraine crisis will be over – but something else will have happened and some of these events will impact on your business.
Back to technology to finish. It was Venturefest last week and I saw just about the most brilliant invention ever. Woof to Wash is a washing machine that can be operated by a specially trained dog to help the disabled and visually impaired. Absolute genius. Next step is the dryer. The name? Well, obviously, Woof and Tumble…