Is now the time to "cut your cloth" to suit your situation?
We are well into quarter 4 of 2020. It's also half term, which gives many business owners the opportunity to have a well-deserved family break.
However, with slow trading forecast for the next six months, the likelihood is many businesses will have a challenge to achieve a positive bottom-line contribution throughout this period.
With Christmas on a Friday this year, normal trading could be over and done with by the 18th December, with most businesses not returning to full operations till Monday January 11th, 2021, particularly the trades. We could have a 3-week shutdown, plus potential local Covid19 pandemic lock-downs, therefore this could be a very lean period to manage through.
So, what should you focus on now, within your business?
10 key areas to review over the next 2 weeks.
1. Review your business performance to date. Ultimately, the numbers on your Profit and Loss (P&L) are the outputs of all your activities over the year. This is one of the most important documents in your business. So, get your accounts up to date and compare your current and quarterly P&L against the same period last year; then run a variance report against your sales forecast and expenses budget, if you set them.
Where have you improved? Some businesses are doing well, so are there more gains to be had? Highlight any opportunities and put actions in place. Now could be a good opportunity to increase your prices too for those products and services which are selling well or if you are overwhelmed with enquiries and workload.
Where have you fallen behind plan? If your expenses were too high, determine why and agree where these could be trimmed and reduced as we head into the winter period. If sales have dropped, determine the reasons behind this fall. Consider if this lies with a particular product or service or a one-off deal which skewed the figures last year. If there has just been a downturn in business due to the current economic climate, assess if there is a different approach to improve these numbers. Perhaps better marketing and promotion of your services to new and existing customers. Get your team around the drawing board and agree on a plan. Create a revised forecast consider the expenses budget and set realistic targets for the remainder of the year starting from the 1st November.
Ensure you check your balance sheet too. If it does not look good for your business and cash will be tight in the short to medium term, do not leave things as they are. Consider taking remedial action, reduce the cost base and explore your options for working capital requirements and a cash flow injection.
2. Examine the current checklist of jobs. If the order books are full and you have got the staff to cover, then that is great. If your workload planning forecast shows gaps and potential idle time, start by chasing any orders (PO's) to bring these forward in your planning. Can you secure any additional work during the next few weeks? If work looks to be slow, ask employees either to take a well-deserved holiday or utilise the furlough scheme (CJRS) and new Job Support Scheme (JSS). But ensure you have enough slack within the productive staff to cover any reactive work and call outs that might come in.
3. Chase aged debtors. Whilst you may be entering into the quieter period, it is cash that will ensure your survival during these leaner periods. Pick up the phone and chase those customers whose debts are overdue. If you have some aged debtors, worth speaking to local solicitors, accountants or the Federation of Small Business (FSB) as many offer debt recovery services.
4. Review your marketing and sales plans. Analyse what worked and what has not. Which activities sparked interest from new or existing customers? Focus on doing more of what works and ditching what was not working. Without networking, exhibitions and events that helped to promote the business in the past to reach new clients, review what else you could do, such as picking up the phone and cold calling and plan activities with your team accordingly.
A lull in trade is also a good time to update your website, write new blogs, re-brand to realign your business and plan themed newsletter releases going forward. Take the opportunity to review and modify your social media profiles. How well do your customers and contacts know you or your employees? Therefore continue to drip feed and share your interests through which ever online platforms you use.
5. Review all employee personal development plans, including your own. Is everyone on the right seat of the bus? As the destination and route may well be different now. Are responsibilities allocated appropriately for the business' requirements going forward? Are there any gaps in capabilities or skills? The next few weeks present an ideal time to hold 1-2-1's with employees. Start afresh with a blank piece of paper and map out the ideal hierarchical structure for the "new normal". Start working on timelines and plans to secure these roles and responsibilities, with the aim to develop your businesses capabilities further.
6. Are there any maintenance, IT system upgrades or system improvements to gain efficiency? Reflect on when you were busy; where were the pinch points or bottle necks? Could these areas be improved and streamlined whilst you're in a quieter period? enabling you to improve response times and capacity in the future. As a team, agree priorities and decide on implementing any actions.
7. Review all policies and procedures. A quieter period is an ideal time to be working on updating policies such as HR, GDPR, privacy notices and H&S documents. Work on securing and documenting new processes whilst you have the time.
8. De-clutter and archive. This could be a great time to cleanse and clear out all those old files sat gathering dust, both physical and online. How about sitting down to complete the essential but monotonous task of clearing out your old emails? Everyone works more efficiently when there is less clutter around. Also, complete tasks which you've been putting off for so long. Clear your desk at work if your planning on working from home, empty the drawers, cleanse the shelves and online archive systems; ultimately creating a new working environment that works better for you.
9. Get yourself out there (virtually). Whilst most networking and business events are cancelled, check out Eventbrite and see what's going on virtually even outside the area or country. It is also a good time to meet existing customers, as they are likely to have more time for you to discuss current and future business challenges and potential requirements. Even scheduling a meeting over a walk in the park will be a welcome change for all. Do not view this hiatus just as a business downturn, stay positive and be proactive, as this is an opportunity to build, nurture and develop valued business relationships.
10. Take some downtime for yourself. Do not feel that you have to be in the office or at your home desk every hour of every day. If it is quiet, take the opportunity to take a breather, even if you had your holidays! Go for a long walk one afternoon or read a biography of someone who has inspired you. Whatever your release is, use the time to reflect, create and obtain some thinking space.
It is important to make time for you. A relaxed, refreshed and refocused mind is likely to be far more effective than a stressed one. And living in the modern age of social media and smart phones, you can easily pick up any important messages.
Come November, you and your team want to be refreshed, full of enthusiasm and brimming with energy, working to a clear plan prepared for the looming storm of intensity, potential demands and business challenges leading up to Christmas.
Should you just be stuck and not sure which way to turn, or where to start. Please, by all means, do get in touch. I am more than happy to have a no obligation confidential chat whether physically, over a walk or virtually utilising MS Teams.
Take care and enjoy your break.
Peter FlemingMobile; 07966 686112