If you are a business owner, you may be wondering, as we come out of lockdown, will my business survive? What funding or Government support is available? And what changes do I need to implement to adapt to a new way of operating?
In this blog, we will answer these queries for you.
The first step in getting your business back on track is to identify and mitigate any risks, which could be in any area of your business, such as the following:
While some elements of running a successful company are out of your hands, it is best to focus on the things you can control.
These elements include working on the business, product or service mix, marketing and communications, Human Resources (HR), as well as finance, profitability and cash flow.
Working on the business
Working on your business is when you take time out of your day-to-day role and focus on planning.
It is easy to get bogged down in daily tasks and forget to concentrate on what you want your future to entail.
Without a plan, you don’t have a clear understanding of what you want to achieve.
And, once you’ve set that plan, you need to review and update it regularly.
Your best efforts in setting the plan today aren’t worth anything if you never look at it again.
So, you need to set aside time to document your process and then ensure you’re on track.
When setting a plan, it helps to have up to date information regarding your finances and cash flow, so that your plans are based on the economic realities of your company.
Product or service mix
Perhaps the best area of opportunity in the current climate is to review your product or service mix.
You may even be considering diversifying your offering, moving online if you haven’t already or focusing on different customers.
You should have information on hand to evaluate each product or service to see which are selling well and which aren’t.
Have any of your products or services become obsolete? Are there any complementary products or services you could add to your mix?
A useful framework for you to make a plan for adapting your product or service mix is the Ansoff Matrix.
The Ansoff Matrix is a strategic planning tool that can be used to devise strategies for future growth. It helps you determine your marketing strategy and understand the risks when expanding your offering by showing four strategies for growth based on new and existing markets and products.
Marketing and communications
There has never been a more important time to establish an effective marketing and communication strategy.
One thing’s for sure, your loyal customers will be eager to support you as you get back to business, and there lies an opportunity for you to broaden your customer base.
By clearly communicating your intentions across multiple channels, your advocates can like, tag and share their support.
Start by crafting your message, which above all else should be clear. Messages to consider are as follows:
- Safety measures you’re implementing
- Opening hours
- Lines of contact
- Product or service mix
Customers need to see that you are open for business and active.
Human Resources (HR)
HR is another hugely important consideration. Your plan should assess your current HR needs.
Can you afford to keep all of the existing team on board? With your changed product or service mix, do you need to recruit new people?
You’ll need to clarify your desired structure before looking for new employees.
You should shape new roles based on what the business needs rather than attempting to shape existing people into new roles.
Having the wrong person in a position can be very damaging in the long run, both for them and your business.
Assessing your HR needs within each of the departments in your business is a great way to future-proof your organisation structure.
Remember, some positions may need to remain remote for a while or perhaps permanently, so you should make sure that employees are equipped to conduct their work effectively.
Finance, profitability and cash flow
All of the above points will have an impact on your finance, profitability and cash flow. It’s vital to get the order right here.
Start with personal circumstances and determine a personal budget for the next 12 months.
Then, do your business budget and see if the personal budget is achievable given the business’s cash flow and profit forecast.
If you’ve struggled with cash flow in your business, it will come down to one or more of these seven causes of poor cash flow:
- Accounts receivable process
- Accounts payable process
- Inventory process
- Inappropriate debt or capital structure
- Overheads too high
- Gross profit margins too low
- Sales levels too low
Manage and monitoring cash flow can be time-consuming and stressful, which is why it helps to employ technology and the outside expertise of your trusted adviser, such as Davis Grant.
A cash flow crisis is the most common reason for most business failures, so you should get the support you require in this area.