The last few years have been a roller coaster for small and large businesses and the most turbulent years in a generation. However, the Global impact and fear around the effects of Covid-19 has really brought us some new challenges.
Over the next few weeks and months, it will be highly probable that we will continue along a dark path. With lack of clarity on how Covid-19 will impact us all and even how post Brexit will look. We'll see the UK and global customers shy further away from the high street, out of shopping centres, reduce their travel and leisure spend, resulting in business owners sitting on their hands, reeling in their spending, delaying major purchases or even shutting up shop.
However it won't necessarily be all doom and gloom!
Here are my tips to ensure stability during times of volatility:
1. Step back and take an external view
Step off your busy business roundabout NOW! Set time aside to talk to industry experts, watch on-line briefings, webinars and get up to date with what the prospects are for your industry. Fully understand how these events could affect your customers, their customers and your own business cost base. Also review the likely impact on your own personal situation such as reduced personal drawings, dividends, pensions, investments and your future personal commitments.
2. Seek and Ask for Help.
Once you've determined and mapped out any perceived threats or opportunities. If concerned or you envisage a risk to your business, seek professional advice now and don't do anything radical unless you are professionally advised to do so.
Remember "Cash is king". If you don't have the money reserves now or due to come in, determine how will you pay your supplier bills, wages, rent, taxes etc?
Speak to your bank first and foremost as many business banks have special term funds and alternative business funding support packages to help businesses with cashflow in the short term.
3. Communicate with staff
Hold meetings with your key employees and managers and share any potential implications that may affect your business.
Not every business sector will be negatively affected and therefore don't just focus on the negatives as there will be some opportunities too. Even if apparent, bear in mind as soon as we see some light at the end of the tunnel and some good news starts to filter through there will likely be pent up demand for products and services.
Therefore, consider planning and preparing for the upturn too.
"Failing to Prepare is Preparing to Fail" Benjamin Franklin.
4. Scenario planning
Draw up at least 3 potential scenarios based on low, medium and high-risk outcomes; create action plans and review your market drivers and business data at least weekly, even daily if necessary.
Agree critical trigger points and implement appropriate actions when required. This is a very worthwhile exercise even if trading conditions don't deteriorate too much during the next few months. The UK government and EU are encouraging businesses to carry on as best they can, however, ensure you do some scenario planning.
5. Communicate with staff (again)
Consistently communicate, staying positive, stick to the facts, be clear and support your staff. Hold staff meetings, tool box talks, 1-2-1s, and set up a Q&A forum. Employees could be concerned that their jobs may be at risk, particularly if you have no or reduced forward orderbooks to fulfil.
By engaging your staff and focusing on the things you can influence such as improving employee productivity and efficiency, along with reallocation of resources you could reduce costs and make a positive difference to your business bottom line performance even if sales growth is flat or declines during the remainder of 2020.
If you do need to cut costs and reduce headcount again seek professional HR help and respect all parties through the process.
6. Maintain close contact with your customers
Ensure you stay close to your customers and learn about the predicted impact and trends in their industry sector and understanding of their customers market drivers.
Keep in close touch with those who have already ordered but not taken delivery and check if there are any risks to cancellations. Due to raw material cost fluctuations and challenges to global supply chains you may have to incur increased costs for your products, deal with delayed delivery resulting in compensation or reduced margins, therefore you may need to have price review or some difficult conversations. These are best to be started as soon as possible. There may even be positive business opportunities with some of your customers, therefore evaluate your marketplace and exploit any quick wins if applicable.
"We are in unchartered waters"
No matter what the pundits and politicians say no one really knows how long the global pandemic will last, what the short term and lasting impact will be and not forgetting what a post Brexit UK will look like at the end of 2020.
7. Being agile and staying ahead of your competitors will be a key success factor.
Ensure you continually analyse your business market drivers, review any short- and medium-term business plans based on the above steps. Continue to measure business indicators, market trends and adapt your business accordingly. Also make sure you keep your staff, customers and suppliers up to date with any changes in your trading capabilities.
"The greatest danger in times of turbulence is not the turbulence itself, it is to act with yesterday's logic" Peter Drucker (1974)
Need some impartial advice?
I'm more than happy to listen to your business challenges, share some thoughts and ideas and signpost you to the appropriate professional, either over the phone, skype or face to face.
My contact details are below and note my initial consultations are free.
Peter Fleming 07966 686112