Chartered Accountants: Business in the Time of Covid - Planning tips during uncertain times

This latest COVID-19 lockdown caught us all by surprise but we worked hard to stop the outbreak in its tracks before, and we can do it again this time.

It’s been a challenging 18 months for businesses. With the widespread disruption, many were just starting to get back on their feet. Sure, businesses are encouraged to adapt and pivot quickly, but how do we do this really, when planning several years ahead has become even more complicated?

While there are some things we still cannot fully control at this time, there are still many things businesses can do to support and strengthen their operation. Taking action can give us a sense of control and even motivate us to pivot our businesses.

If you need some tips on how to plan for your business during this pandemic, or simply want to breeze through some light reading, carry on. Hopefully, you’ll pick up a useful nugget or two along the way.

Understand the numbers

I know—not another cliché—but we can’t stress this enough: you need to know your numbers inside and out! It doesn’t matter whether you failed sixth form Maths or excelled in statistics, understanding your numbers is key. Without this knowledge, your plans are just as good as a wild guess. You can’t look for areas of improvement in your business without knowing why your numbers are skyrocketing or staying stagnant. You can be optimistic, or conservative with your plans but make no mistake—unless they’re based on solid numbers reflecting your business’ true state of affairs, they can only be hit-and-miss.

Manage your cash flow

Once you have the right numbers, the first thing to look at is your cash flow. Every business needs a healthy cash flow to stay afloat, especially during a crisis.

Your cash flow is probably running smoothly now, but it pays to plan ahead and be on the lookout for potential problems so you can find fast solutions. How quickly can you take in cash and convert it to inventory and back into cash? You need to know the speed of this cycle to assess whether your operations are tying up cash. Would you need new payment methods to get paid faster, or business financing in case of unforeseen circumstances?

Use cash flow assessment tools, including cash flow forecasting to answer these questions. If you want assistance with this, don’t hesitate to give us a buzz or flick us a message. There are always ways you can improve your cash flow—talk to your go-to Outside team member!

Pivot and scale

Next, it’s time to focus on your growth. Look for opportunities and new markets. Remember: the goal is not just to survive but to thrive.

Change is the only constant thing in this world, so with or without COVID-19, your business will always need to diversify or adapt to the times. You can simplify your processes or adjust your products and services to better suit customer needs. Your business needs to keep improving— find out what’s working and what’s not.

Know the risks

Do you know all the risks involved in your business? Do you rely heavily on your biggest customer? How do you plan to survive if the economy worsens, or your star employee leaves the team? Do you have insurance? Make sure all your bases are covered! Identify the risks and know how to mitigate them. During a crisis, there are changes in purchasing behaviour, customer needs, and distribution, among others.

Take the opportunity to have a good look at your business and create contingency plans to make it more resilient. Use a business assessment tool to identify key people, activities, resources, and value proposition. Look at where the business gets and spends its money. Once risks are assessed, you can start planning for innovation— this could include new suppliers, new technology or even a new market.

Be up to date

There’s a lot of noise out there—listen to information that’s valuable and relevant to your business. Government policies rapidly change. Restrictions may pop up suddenly! You don’t want to miss out on free money or overlook a restriction or obligation that you may be penalised for not following!

Utilise management reports

You can’t manage what you don’t measure. Take a good look at your resources and see how you can maximise them. Do you really need that extra space in the office? Do you know how much value a team member really brings to the bottom line? All costs must be regularly reviewed to make sure you’re not flushing any money down the drain. 

You’ve chosen your dream team but they need your leadership to get the best out of them. Show your support, even for just a few hours a week. Check in with them, connect with them. Your team consists of employees, customers, suppliers and even landlords. The quality of the relationships you’ve built with these people will always reveal itself in difficult times.   When the going gets tough, a strong team will work together and get through it.

Put people first among competing priorities as you try to pivot your business. Have a chat with your customers and employees about their questions and concerns so you keep communication open. Our brains can be in “fight or flight” mode at this time so if you want to plan, why not use management reports to encourage logical and creative conversations among the team.

In case you didn’t know—management reports are one of our know-hows! Sing out if you need any help with this.

Test your business model

We also advise you to test your business model. How can you run at the right level of profit your business needs—again, not only to survive but to thrive? Check your pricing and make sure you’re not running at a cash deficit. Challenge the business to create more income streams on a consistent basis.

 

Want to kick start your planning? Give us a call or send us a message if you’re keen on getting deeper insights into your business operations and strategies. We’re a click away any time you need us!

 

Your Outside Team

 

 

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