Are you a business owner feeling overwhelmed or apprehensive about the coming year?
Aware that changes need to be made but not sure which ones?
Many small business owners don't take the time to focus on strategic planning for their business - if you're one of them, this blog is for you...
In it, we'll list out 10 different possible responses to change that may help your business to start strong, stay strong or exit strong.
Face change strong.
Be honest, how is 2025 working out for you so far?
At the end of 2024, after the UK budget had been announced & amidst a context of pre-existing inflationary pressures & general economic uncertainty, Rock.Partners canvassed our clients & wider contacts to see how they were feeling about the strength of their business.
We met with a mixed bag of emotions.
On the positive side, there were several business owners (Rock’s clients among them) who felt focused, even excited about the year ahead - confident that they could see opportunities amidst the uncertainty.
However, many more seemed to be wavering somewhere between tense apprehension, outright fear & defeated resignation – with the two biggest concerns being
1. rising people costs from increased NI contributions & minimum wage thresholds putting unwanted pressure on already tight margins &
2. maintaining revenue from customers & clients focused on budget freezes or cuts.
A few were wearing a definite air of denial, expecting budgetary U-turns or amendments (which haven’t been forthcoming) & one founder we spoke to had his head squarely in the sand, blindly hoping it would all just go away (spoiler alert: it won’t).
Two months into 2025, when all the strategy & planning posts have started to settle on social media – what’s changed? Not a lot, from what we can see.
The thing is, whatever emotion you’re currently experiencing about your business’ future, change will happen regardless.
So, Rock’s view is that you might as well face it strong.
Making tough decisions about the future of your business may feel overwhelming but there’s no better time than now to review your business direction, including taking stock of where you stand & charting a clear path forward.
For most businesses, ploughing on regardless isn’t a realistic option.
Changes need to be made - but which ones?
That’s the killer question
& the answer will differ for every business.
So here’s some food for thought… & if you want to chat to Rock about any of this, drop us a line on info@rock.partners or book a GRIT Session.
1. Headcount: Restructure or Rebalance?
Employee costs are often the largest expense for businesses especially those that are service-based (as are most of Rock’s clients). We know that some companies are considering reducing headcount or restructuring their teams - but what works best for your business?
Keep Senior Staff, Outsource Junior Roles: Maintaining experienced leadership while outsourcing non-core or entry-level tasks to freelancers or agencies can streamline costs while preserving strategic decision-making & protecting client relationships.
Retain Junior Staff, Outsource Expertise: Alternatively, retaining cost-effective junior employees & bringing in senior consultants only as needed can inject much-needed expertise without committing to the expense of full-time senior salaries – but you need to be able to maintain service delivery & standards with a less expensive workforce.
Questions to ask: How heavily does your business really rely on its people? We all like to say it but how much is it actually true? How experienced, skilled or senior does your in-house team really need to be day-to-day? What functions could be outsourced – whether short-term or long-term? What’s the relative CBA (cost-benefit analysis) of in-house vs outsourced for these functions? And, is it really a headcount/cost issue or a productivity one? (i.e. does your people approach or culture or need reviewing instead?)
2. Look elsewhere for Cost Reductions
If reducing headcount isn’t an option (or preference), look at other areas to save money:
Operational Efficiencies: Are there processes or workflows that can be automated or streamlined to cut costs?
Suppliers & Contracts: Can you renegotiate terms with suppliers or find alternative providers? Are there any agency contracts that you could save money by bringing in-house - without materially compromising output?
Office Space: With remote & hybrid working models becoming the norm, could downsizing your physical office space reduce overhead costs?
Action: Conduct a comprehensive audit of your expenses, line by line, to identify potential savings opportunities. Review your biggest external partner contracts - consider the terms of each contract vs the relative importance of the relationship to the business. Ask your team – the people doing the work day-in, day-out might have ideas about how it could be done more efficiently.
3. Increase Your Prices
Many businesses are hesitant to increase prices, fearing customer backlash. However, with rising costs across the board, it may be not only be necessary to maintain profitability BUT could even be a brand-building opportunity too…
Transparent Communication: If you decide to raise prices, be upfront with your customers. Explain why the change is happening & highlight the continued value you provide. Strong existing relationships, met with the cost, hassle & risk of switching providers, mean you might be surprised at lower levels of resistance than you anticipate (providing it’s an incremental rise, not an out-&-out hike!)
Tiered Pricing: Introduce tiered packages or premium services to give customers different options that suit their budget – incentivise the higher priced packages to make them irresistible. (N.B. As part of this strategy, you could consider introducing high value/low cost services - such as Rock's GRIT Sessions - or other services that give people more options to start the journey with you)
Questions to ask: When was the last time you increased your pricing? Does your current pricing reflect the value you deliver & the costs you incur? How does your pricing compare to your competitors/peers – does it support the market positioning you want? Can you test the waters by proposing pricing increases to a few close customers first?
4. Leverage your existing networks
Typically, it’s far more expensive to acquire a new customer than retain an existing one so, if increasing your prices means jeopardising a valued existing client base, try make that client base work harder instead:
Volume, Cross-sell or Upsell: Can you drive revenue by getting existing customers to buy more of something? Or to buy additional products or services from you? Or move them to a higher priced service package?
Referral: Can you incentivise existing customers to refer your business to others & bring in more revenue for reduced cost of sales?
Partnerships: Look at your supplier networks - is there an opportunity to set up a formal Partnership scheme to incentivise them to refer customers to you, or allow you to market to their customers?
Action: Review your existing client & supplier data in detail. Don’t just consider value in monetary terms – ie. which customer segments generate the most revenue or profitability – but also consider their degree of “fit”, i.e. the clients that you enjoy working with the most, the ones that you deliver the best work for, the ones that have the potential to buy other services, the ones that go on to refer your business etc. When times are tough, preserving & leveraging existing relationships is especially important.
5. Target a Different Client Base
If your current client base is already struggling with the economic downturn, or would not be able to tolerate a price increase, or product upsell, perhaps consider shifting focus to a more lucrative audience:
High-Value Clients: Can you target larger businesses or clients with greater budgets?
New Markets: Can you explore opportunities in sectors or geographic regions less affected by current economic challenges?
Caveat: Remember it’s hard to break into new markets & segments. Will you be able to demonstrate credibility effectively? If costs are a consideration, will you have the budget to invest significantly in marketing to a new audience? If not, how will you break it? Remember that you’ll almost certainly have to revise your messaging & possibly your brand identity & assets too if they're not aligned with a more premium or demanding market.
6. Diversify Revenue Streams
Relying too heavily on one source of income can be risky, especially in uncertain times. Diversifying your revenue streams can help stabilise your business:
New Products or Services: What complementary offerings can you introduce to serve existing customers better?
Recurring Revenue Models: Can you implement subscription services or retainer-based contracts to create predictable income?
Digital Transformation: Explore online sales, e-learning, or digital consulting to reach new audiences.
Key Question: How can you expand or pivot your offerings to cost-effectively create additional revenue streams? Have you got the right people in the business to support a different offer? What external support will you need to make it happen – e.g. will you need to hire digital transformation consultant to get the right tech in place?
7. Change Your Business Model
Sometimes, incremental changes aren’t enough. If your current business model isn’t sustainable, it may be time to make a more significant shift:
From B2C to B2B: Transitioning from individual consumers to business clients can create larger contracts, with more stable terms & more consistent income.
From sub-contractor to D2C: Transitioning from a sub-contractor model to approaching clients directly can increase profit margins & create greater stability of relationships & revenue.
From branded to white-label: introducing a white-label option where a third party markets your products or services under their brand can increase reach & revenue without proportionate marketing costs
From individual sales to subscription: Shifting to a subscription model can provide steady, recurring revenue.
Service-based to product-based: Consider productising your services to scale more efficiently.
From human to digital: e.g. enabling customer self-service, access to advisory information online etc. can reduce the support & administrative load & drive efficiencies elsewhere
Action Tip: Assess your current model’s strengths & weaknesses to determine if a pivot is necessary. Remember that changing your business model will likely require upfront investment – possibly including a whole new rebrand - & you’ll need strong cash flow to see any new model embedded. Do your homework first!
8. Partner up
If you’re struggling in your industry, you’re likely not on your own. If the competition is struggling too, can you kill two birds with one stone & look at a merger, partnership or cross-referral agreement?
Reduced cost of sales: Some clients or projects are just a better fit for another provider. Having a legally binding cross-referral agreement can help you get leads & work more easily - but it needs to work both ways.
Economies of scale: bringing two businesses together gives you the opportunities to share overheads, streamline duplicated costs, & focus centralised budgets more effectively, as well as leverage complementary resources & combined revenue.
Reduced competition: plus, by partnering up with the competition, you’re effectively removing it, making it easier for your target customers to choose you.
Caveat: Whilst it makes sense on paper, there’s a lot that can go wrong with partnerships formed under duress. Honest conversations need to be had about each party’s respective ambitions & objectives from the deal; psychometric testing might be a good idea – to understand each other’s personalities & how well you’ll work together / complement each other or potentially clash; full due diligence needs to be completed on each business, along with individual independent business valuations; then, assuming both parties are all good with all of the above & still want to go ahead, you’ll need professional legal contracts creating, reflecting not just how the business will be run, but also the nature of the ownership (who owns what shares etc). & what happens if one partner wants to leave or buy the other out. Don’t forget the two business brands either – what happens there? Do you take one brand, merge the two or start afresh? And how will communication be handled with existing clients & staff members… let alone continuity of service contracts etc. (Rock's founder, Rachel Vigers, has deep experience in brand architecture & advising management teams on M&A brand management)
9. Sell up
If none of the above options work for you – or you’ve simply run out of motivation, you might consider selling the business altogether.
When businesses are in distress, it’s common for business owners to assume they have no value. That’s not necessarily true.
Just because you couldn’t make your business work - in its current form & in the current environment - doesn’t mean that another business owner (with a different set of circumstances or parameters) may not have a different outcome, e.g.
A bigger jigsaw: your discrete, independent business (or even a part of it - e.g. a discrete department, service, product or particular client segment) could be the missing piece in someone else’s bigger business – e.g. selling complementary services or serving a complementary audience. Being part of a bigger business might create the scale & resources buffer your business needs to survive & thrive.
Deeper pockets: Someone with greater cash reserves or investment funding is better able to ride out tough economic conditions.
Caveat: Selling a business (or part of it) is way harder than anyone anticipates. It takes time to find the right buyer & it takes a whole heap of due diligence to get a deal through to completion. If you’ve not got complete, accurate financial records (ideally for at least 3 years), you might struggle to satisfy what a prospective buyer needs to know. Also, to be blunt, you have to take your ego out of the equation – when you’re selling a business in distress, then preserving people’s jobs & client contracts take priority & compromises need to be made. Rock's professional delivery partner network include companies that specialise in business valuations, sales & exit consultancy. If this is a space you're considering, ask Rock.
10. Wind down
While it may seem like the last resort, winding down a business doesn’t have to be seen as a failure. In fact, knowing when to walk away is a chronically undervalued skill!
For some business owners, this can be a strategic decision:
Cutting Losses: If the business is no longer viable, exiting now can prevent deeper financial strain – as well as negative impact on health or wellbeing.
Realising Asset Value: Even if the business it not worth selling as a going concern, it may be there are assets that have monetary value independently – e.g. registered trademarks, fleet vehicles, owned premises etc.
New Opportunities: Closing one business could free up resources & energy to pursue more promising ventures.
Key Question: Is the effort & investment required to sustain your business – be it emotional, mental, physical or financial - worth the potential outcome? This is a tough situation to be in - we're here to listen & to signpost for support if you need it.
Your Opportunity
Taking the time to review your business direction is not just beneficial—it’s essential:
Clarity: Step back from day-to-day operations to reassess your goals & priorities.
Proactive Decision-Making: Address challenges before they escalate into bigger problems.
Opportunities: Identify new ways to reduce costs, grow revenue & improve efficiency.
Resilience: Build a stronger business, one that can weather the waves of change more sustainably.
Your business, Your way.
There’s no one-size-fits-all solution to suit the specific challenges facing your business.
The right approach will depend on:
Your long-term vision for the business – where you want to be
Your development goals & plans – how you plan to get there
Your industry & market conditions – inc. how your positioning & offer fit in
Your team’s strengths & weaknesses – particularly in relation to the business strategy & proposition
Your current financial position – esp. your cash flow & resources
Taking stock now—and dedicating time to strategic planning—can make all the difference.
Review. Decide. Act.
At the start of this blog, we made the point that change will happen anyway.
So you might as well make sure you're prepped & ready for it.
For many businesses March marks the end of the current financial year – & the start of a new financial year is the perfect time to reflect, review, & realign.
Whether you decide to cut costs, raise prices, diversify, or even pivot entirely, the most important step is to take action.
And Rock is right here for you – to help you regain control & adapt to challenges so your business can start, stay, grow or exit strong.
We are Rock.
The business consultancy focused on four core foundations – Direction, Connection, Impact & Value.
Working with a hand-picked team of specialists, Rock helps determined business owners to, first, define solid foundations &, then, align their whole business cohesively around them.
We're passionated about supporting SMEs with their strategic planning. Our foundations strategy approach is robust & relevant - blending business & brand in one.
When it comes to delivery, Rock’s professional partner network has you covered - from chartered accountants to business lawyers, market researchers to IT advisers, graphic designers to copywriters, HR support services to culture consultants – Rock.Partners can coordinate your commercials, creative & culture in complete alignment.
Strong, straightforward & silo-free.
Rachel Vigers, Rachel@rock.partners
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