What things should you have in place to help you and your business when in recovery?
These rocky times will have tested even the strongest business owners. But by taking the right actions, we can ensure we come out stronger, and more resilient. Here are our tips for business recovery.
We are fortunate at Seed to already run a cloud-based business. This meant when lockdown started, we could just pick up our laptops, and carry on as before. That’s not to say it’s been an easy ride. Juggling kids, family, clients requiring vast amounts of help; it’s been quite the crazy few months. And things are set to change all that drastically.
So what can we all do to protect our business and ensure we’re ready to get going, and keep going?
Here are some of my top tips:
- Re-invent – you can recover and re-invent your business through four main opportunities:
- Innovate – do something new. Offer a new service or product line (eg a business changing from selling travel pillows, to hair clippers).
- Re-engineer – use what you’ve got to produce something different (look at the gin distilleries making hand sanitiser).
- Adapt – change the way you deliver your products or services. Think of a beauty therapy business who offered a free online skin consultation when a product was purchased.
- Widen your lane – broaden your product or service offering. A cafe that sold coffee and cake, also offering ready made meals, boxed sweet treats, ingredient boxes etc.
- Personal budget -your business is there to serve you, not the other way round. You should not be a slave to your business. BUT at a time like this, are there savings in your personal spending that can reduce the cash flow strain on the business? Have a look at your monthly spending and consider creating a simple spreadsheet budget. There are plenty of templates in Google Sheets and Excel, or you can search online). Be realistic! (We can also provide you with a template if you’d like).
- Build up your Business Budget – now that you know how much you realistically need from the business, you can work out your business budget. I won’t go into detail here, but you need to consider how much extra cash you want to build up in the business, cash movements, loans (drawn and repaid), asset purchases, personal drawings, tax, overheads, your Gross Profit %, and finally the sales you need to make to achieve all that. Once you’ve done the annual budget, you’ll need to break this down onto a month by month basis. (We can help you with our forecasting service if you’d prefer).
- What to measure, and how – identify five Key Performance Indicators (KPIs) relevant to your business. Once you have your budget and KPIs, it’s important to monitor these monthly. We can help you with this and create a dashboard using Futrli
- Opportunities – identify five key opportunities that you can work on – this might be downsizing, or removing your office space, new lines of revenue, business acquisition, technology adoption etc.
- Vulnerabilities – identify the five vulnerabilities facing your business – poor cash flow, sustained downturn in demand, poor debtor management etc. Once you have your 5, pick 2-3 Critical Challenges – these might be deciding whether to sell or liquidate part of your business, or setting up an online sales platform. Be HONEST with yourself on this one. It takes bravery to acknowledge what you have to do.
- Risk Analysis – identify and analyse all the risks in your business. Assess the likelihood of each risk and the consequences if the risks aren’t mitigated.
- Goals and Actions – finally, once you’ve carried out all the above steps, pull it all together to create a plan with goals, actions and responsibilities. Goals need to be SMART, and they need to be assigned to someone (even if it is just you in your business!). These goals and actions need to be regularly reviewed, probably monthly initially, and then moving to quarterly after 6 months or so, depending on the business.
Whilst these 8 actions are most crucial for business recovery. We would also recommend creating a business forecast and consider updating your organisation chart (if you have employees, or you have a team of outsourcers). Set aside some time to work on this, and it may need to be done in instalments – from personal experience of doing exactly this for my own business, this is no small job. You need to have focused and uninterrupted time.
If you’d like some help, we have a number of ways to support you in this (some free, some paid-for) – if you would like us to send you more details on the help we can provide you then please do get in touch.