Understanding the business macro environment – Part 3

Today, we will continue are research to further our understanding of the macro environment using Enfield as the target area. In case you missed the beginning, a link to Part 1 is shown below.

Understanding the Business Macro Environment – Part 1

Note: By understanding of the business macro environment, we mean understanding the wider business context within which you operate

Recall the diagram below showing the macro environment within the transformation lifecycle

Today, we’re going to continue our research into our target area of the Enfield Borough of North London using the data we collated so far in our spreadsheet.

One of the primary questions I have in my mind when looking at other businesses is “how long have they been around?” This gives me an understanding as to whether they are stable and successful over the long term or whether they are a fledgling business. The table below, extracted from our spreadsheet, shows the dates of incorporation for businesses totalled and grouped by period

Interestingly, 11% of businesses where incorporated before the start of the millennium. This makes sense since our earlier research showed that 92% of businesses have less than 10 employees.

Out of interest we have shown the top 10 oldest businesses in the Enfield borough and well done to Beale’s Ltd for surviving since 1895

Ok, slight diversion but it does beg the question as to what these companies have done well to survive for so long. I would hazard a guess that part of the question is answered by it being in a stable industry but we’d have to look in more detail to really find out.

So, what else can we glean from our spreadsheet? Lets look back at table 1, we can see 76% of businesses in the Enfield Borough have existed only in the last 8 years

The chart below shows dates of incorporation each year since 2000

As you can see there is an explosion of new businesses since the start of the decade.

The comparative chart below is from the Governments own website, which shows overall UK volumes of incorporation.

In the next part we’ll break the list down further and start to look at some of the sectors

Feel free to complete our free business model assessment Check if you want an insight into how you’re managing your business strategy

Brian Hill is the principal partner at Rubiks Cube Management services and can be contacted here

Understanding the Business Macro Environment – Part 2

Today, we will continue our research into the macro environment using Enfield as the target area. In case you missed part 1, here is a link below

Understanding the Business Macro Environment – Part 1

Recall the diagram below showing the macro environment within the transformation lifecycle

Transformation Lifecycle

Below, is a post code map of the Enfield Borough, which will help us with a visual analysis of the target area

Enfield Post Code Map

The below table also helps us with a more thorough listing of all post codes.

We can use government data to drill down. For this blog I’ve provided a link below. Note: We have our own database with a much richer data set.

Director of London Businesses

Although the file is over 300Mb in size it can be opened in Excel and analysed thoroughly

For this exercise, we have taken the Post Codes above and filtered out all unnecessary information. This brings the file size down to a more manageable 3.7Mb.

What we find are the following:

  • Total number of businesses Registered           =          16,943
  • Total number of active businesses                   =          15,952
  • Total number of inactive businesses                =          991

Of the 991 inactive businesses, the following table gives a breakdown

For this exercise, the companies we are interested in are the active ones and so lets look at a decomposition of those companies by SIC code (SIC stands for Standard Industrial Classification)

So, lets look at the top 10 SIC codes in the table below

Once we have identified a SIC code of interest, we can do several things including drill down further to the business level or go wider, including industry level information such as revenue per SIC

Feel free to complete our free business model assessment if you want an insight into how you’re managing your business strategy

Brian Hill is the principal partner at Rubiks Cube Management services and can be contacted here

Understanding the Business Macro Environment – Part 1

The below diagram shows understanding the macro environment within the transformation life cycle

The business macro environment

For the purposes of this discussion we will analyse the demographics of my own local business area of Southgate, North London

Enfield Borough

Whenever thinking about demographics our own local government can provide some very useful information. Below are some links to some very interesting documents

Enfield Borough Profile – this is a pdf document that provides key facts and statistics relating to the borough including population size and density, age and sex profiles, ethnic and cultural diversity, language, religion, sexual orientation

London Borough Profiles – this is an excel spreadsheet that provides statistics which compare Enfield to Outer London, London and Nationally in relation to demographics, labour market, Economy, Housing, Environment, Transport etc

Let’s look at some of the details held within each document that maybe of interest.

Enfield Borough Profile

The population of Enfield in mid-2018 was 333,869. The biggest regeneration programme was a £6 billion, 20-year project that took place next to Lee Valley Regional Park. The programme generated thousands of jobs and built over 10,000 new homes.

The top 5 languages spoken outside of English where Turkish, Somali, Polish, Bengali and Albanian

In 2018 there were 12,875 businesses registered with 92% employing less than 10 people.

92% of businesses survive the first year. It would be very useful to see what the statistics say about what happens after the 1st year and which types businesses are failing and why

A little bit of background reading shows that Enfield is 12 miles from the centre of London.

As a businessman you would automatically be asking questions relating to how the government would be spending £6 billion or what opportunities there would be when 10,000 new homes are being built. Remember that wherever there are large developments like this, the surrounding infrastructure and services will change also.

Enfield Borough Profile

What I like about the Enfield Borough Profile is the Chart-Map tab, which allows you to filter on a variety of elements. For instance, the filter called Employment Rate % shows that Enfield had a 69% employment rate compared to the national average of 72.2%.

The Profiles tab shows that 64.4% of the population are of working age and that 35% of the population was born abroad.

Interestingly, the Profiles tab gives us the success rate of businesses after 2 years at 74%.

So, we now have 8% business failures in year 1 and 26% in year two and inline with the rest of the country

So, as a businessman, would you like to know more about whose succeeding and whose failing in your geography.

Well, let’s visit the Office of National Statistics and get a breakdown.

Office of National Statistics The below graph shows the survival rates for businesses between 2013 and 2017.

Five Year Business Survival Rates

As you can see from the trends above survival rates have been dropping over those 5 years and this looks consistent for each year after start-up.

What’s also interesting is that by year 5 in 2013 only 46% of businesses have survived.

As a Businessman this is where you want to focus. Do you want to be in the 46% survival area of the 54% failure area?

Feel free to complete our free business model assessment if you want an insight into how you’re managing your business strategy

Brian Hill is the principal partner at Rubiks Cube Management services and can be contacted here

Understanding the business macro environment – Part 2

Understanding your industry

As a business leader one of your most important jobs is to keep your eyes cast on the wider industry. From a strategy point of view the perspective needs to be wide and encompass all the different factors that can affect the performance of your business. Its not just about the products you sell or your immediate competition.

That’s why a framework such as a PESTLE analysis will help you broaden that view. The PESTLE analysis covers the wider factors such as Political (these could be local government or central government policies), Economic (local economy vs. wider economy), Social, Technological, Legal and Environmental.

Lets take the political view. Lets say in your local area there is a change in government from Conservative to Labour. What will this mean in terms of policies? Does Labour support a reduction in business rates while the Tories don’t?

From a social perspective are you concerned about the rise in discontented millennial’s? Or is this an opportunity?

Local economics play a huge part in the success of many businesses. For instance Network Rail plan to open a new station. The building community decide to build new blocks of houses nearby to take advantage of the increased prices taken for properties close to transport. A set of shops then open up to take advantage of local needs. As you can see before long you have a micro economy.

Please feel free to use our template and feedback to us any suggestions for changes. This template can also be distributed among your community.
PESTLE Template download  

Feel free to complete our free Business model assessment if you want an insight into how you’re managing your business strategy