Times of crisis such as the one we are currently living through can be a real test, not just for your business, but also for you as an individual.
It’s important to remember that we are all in this together, and we are here to support our clients however we can. So as we look to the future, now is as good a time as any to share with you our top 5 tips for navigating your way through this crisis, to make sure you come out on the other side well prepared.
1. Safeguard cash reserves
Many small business owners focus on profits as a measure of their businesses health and successful performance. Unfortunately, they will have learnt the hard way that whilst it is great to have profits, cash truly is king. It is the lifeblood of your organisation; cut it off and your business will not survive.
In addition to supporting your employees and your family, protecting your cash flows should be your number one priority at the moment. Consider which payments you can delay, talk to your suppliers and customers to negotiate payment plans - you might be surprised how generous people can be.
If you’re in need of additional funds, there are lots of different alternative financing options out there. Get in touch with us to discuss your needs.
2. Prioritise what is key to survival
You and your team only have a limited amount of time in the working day, and a limited amount of resources. It is essential that you prioritise what is important to you and your business so you can allocate sufficient time and resources to those areas.
Your aim over the next few weeks and months is most likely to ensure the survival of your business. Prioritising things in this way will help you achieve this. It will also help you in the long-term when developing future strategies as it will force you to consider what, and who is essential to your business.
You should be looking at what is important to your survival on a frequent basis, re-prioritising where necessary as the economic landscape changes rapidly.
3. Plan for the short-term
One of the biggest problems facing all businesses is of course the persistent unknown. The certainty of day-to-day business has been stripped away, leaving many small businesses exposed. This raises the question of how businesses are meant to plan in uncertainty. The most simplistic answer is to plan for different scenarios.
No one knows how long lockdown will remain in place, or how the process of getting back to work will be implemented. With such high levels of uncertainty, it’s prudent to plan for different possible outcomes, with key focus on best-case and worst-case scenarios.
It could be that we see a rapid recovery and return to ‘normal’ life, with businesses thriving as consumer demand increases. A more pessimistic outlook may anticipate another outbreak later in the year. It is key to assess how each of these scenarios is likely to impact your cash flow, so that you can develop action plans now to mitigate against the risks of either outcome.
There are a number of pieces of software out there that can help you plan these scenarios. One such application is Fluidly. With its inbuilt AI technology, you can create a 12 month base forecast, and then use the intuitive scenario planning feature, allowing total adaptability to changing environments.
4. Plan for the future
One thing that we can definitely all take away from this crisis is the fact that consumer habits are going to change. Many consumers have been forced to switch to online services, whether this is their food shop, clothes shop, or business meetings. So taking a wider commercial view of how your business is going to be impacted is crucial in developing long-term strategy.
Let’s take a look at an example...
You’re a business selling consultancy services, renting out offices to host client meetings. Now that most business owners have had to become accustomed quickly with the world of virtual meetings, do you still need that office space? If your clients are happy with online meetings, you could save thousands simply by getting rid of the cost of rent from your expenses. Operating remotely, and visiting clients at their offices may instead be a more viable business option, and could even position you better by removing the limitation of location for your clients.
It’s these sorts of long-term changes that you should be thinking about now, and building into your strategic plans. As we’ve already mentioned, there is a mass of uncertainty muddying the waters at the moment, but be sure to monitor any changes that you notice from your customer base.
A simple way to try and identify areas to develop your business is through a simple SWOT analysis. We’ve recently published a whole blog on SWOT analysis and how you can use it to your advantage - check it out here.
5. Change your business habits for the better
No doubt you’ve been forced to change some aspect of how you run your business operations. Most likely this is moving to more online communications and videoconferencing, but these aren’t necessarily bad changes!
Most businesses struggle with change, preferring to stick to ‘the way it’s always been done’ - after all, old habits die hard right? Well now that these changes have been forced into the ‘implementation’ phase by default, own them. But only the good changes of course. Technology can help to reduce business costs substantially, so adopting these changes and new working habits as part of your business culture and standards is a great way to encourage others to follow suit, and give your business the tech update it may have needed.
If these new ways of working also help to reduce your overheads e.g. more people working from home to reduce required office space, then this might be the gift that keeps on giving. It’s up to you to make sure that you don’t fall back into the old ways of doing things.
Many of us have never lived through a crisis like this, and we understand that the pressure you’re under and the hurdles you’re facing may seem insurmountable, but it will be over soon.
We have always advised that every business should have at least a 12 month business plan to keep them on track, but in the current climate we can’t stress this enough. Doing nothing is not an option, so start planning today.
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If you need business planning support, give us a call on 0121 667 3882 or email firstname.lastname@example.org and our advisors will be happy to help.
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