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How to create a marketing plan for your small business - build a brand, target customers and set prices that will maximise sales.

The internet has transformed business marketing. No matter what you do, the internet is likely to be at the heart of your marketing strategy.

Social media is firmly established as a marketing tool. Having a presence opens up new lines of communication with existing and potential customers.

Good advertising puts the right marketing message in front of the right people at the right time, raising awareness of your business.

Customer care is at the heart of all successful companies. It can help you develop customer loyalty and improve relationships with your customers.

Sales bring in the money that enables your business to survive and grow. Your sales strategy will be driven by your sales objectives.

Market research exists to guide your business decisions by giving you insight into your market, competitors, products, marketing and your customers.

Exhibitions and events are valuable for businesses because they allow face-to-face communication and offer opportunities for networking.

Could the Bank of England interest rate fall this week?

19 March 2024

Financial analysts predict that the Bank of England is likely to reduce interest rates in the coming months but will they cut the rate when they meet this week? Businesses are certainly hoping for good news but most economic pundits expect the rate to stay the same.

The Bank of England (BOE) has held interest rates at 5.5% for the past six months. Its next meeting is on Thursday 21 March. Despite predictions that BOE interest rates are likely to come down over the next year, there is no consensus on what will happen this week.

The Bank of England has to balance the needs of the economy while making sure that inflation doesn't creep back up. This month, the Office for Budget Responsibility (OBR) said it expected inflation to hit an average of 2.2% over the course of 2024 and 1.5% over the duration of 2025, before it climbs back towards the Bank of England's 2% target. If this happens, the OBR predicts that interest rates could fall to 4.2% by the final quarter of the year and 3.3% in 2025.

Businesses struggling because of high interest rates

A new survey of more than 1,000 UK businesses, conducted by the British Chambers of Commerce (BCC), has found that 33% say they are negatively impacted by the current Bank of England interest rate of 5.5%. Small and mid-sized firms (39%), manufacturers (36%) and business-to-consumer firms (37%) are more likely to report a negative impact.

The research shows that only 9% say they are positively impacted by the current interest rate - relating to higher earnings on surplus funds. The main negative effect cited by businesses was increased costs for new and current finance, which is either restricting investment or limiting cashflow. Firms also referenced a tightening in consumer spending and higher costs for COVID recovery loans.

However, the scale of the negative impact has fallen from 46%, when businesses were last asked the question in July 2023. Firms were also asked what they would set the interest rate at, if they were in charge, and 4% was the median average response.

"With all eyes on the Bank of England's [next] interest rate decision, our data is a timely reminder about the pain many businesses are suffering at the current level of 5.25%. Firms tell us every day that they are struggling to pay off debts, some dating from the pandemic, and finding it difficult to take out new loans. Expectation continues to mount that a cut in the interest rate is on the horizon, and this is likely reflected in the lower negative impact cited by businesses now compared to July last year. But with firms indicating that a rate of 4% would be acceptable, it suggests there is some way to go before the squeeze on companies' borrowing costs is relieved." Alex Veitch, BCC director of policy.

The last time the Monetary Policy Committee (MPC) met, on 1 February 2024, it decided to keep interest rates at 5.25%. Businesses are hoping for a different decision this Thursday.

Written by Rachel Miller.

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