With 2021 fast approaching, and regional lockdowns still part of the economic landscape, businesses across Sussex continue to trade under extremely challenging conditions.
However, there are many opportunities for growth and there are plenty of success stories out there. So how do you capitalise on these and become one of the ‘lucky’ businesses thriving through adversity?
Below, we provide our top tips to hit the ground running for 2021
#1 Stay close to your numbers
Without a crystal-clear picture of your business’ financial health, you will not be able to create an effective strategy that will help you weather business challenges. By making the effort to understand your financials, including your revenue, expenses, profits, and cashflow numbers, you will be able to plan accordingly.
Up-to-date management information will also assist in the preparation of forecasts. Regular forecasting will be increasingly important to monitor cashflows and identify any pinch points. Sensitivity analysis and increased rigour may need to be factored into cashflow models to reflect different short-term scenarios.
#2 Improve your cashflow
Cashflow is the lifeblood of your business, and ideally, you should be bringing in more income than the amount you are spending to sustain your business. However, before you can improve your cashflow, you must first ensure that you have accurate financial records and an effective accounting system in place.
Once you have these sorted out, it will be easier for you to take control of your cash position through:
• Payments from clients: timely invoicing, chasing payments, and offering to restructure overdue payments
• Reduce your expenses by reviewing software subscriptions, as well as renegotiating terms with your suppliers and lenders
• Secure financing from government grants and loans, take on investors, or get short-term financing. However, if you are thinking about incurring debt during a recession, we would highly recommend consulting with your accountant or financial adviser first.
• Make extra effort in nurturing your relationship with existing customers.
#3 Adapt, don’t recover
When business gets disrupted, most businesses focus nearly all their attention on how to recover their old services. By looking forward, you’ll see that the business environment has moved.
It’s not about hoping that old services become popular again; it’s about adapting old services to make them better, more relevant, and more valuable to consumers today.
#4 Stick to strategy
When the only constant is change itself, it can be easy to find your business further and further away from your initial objectives and goals. Detailed plans and forecasts are near enough impossible at the moment so strip your strategy back. Focus on your vision of where you want to be and then build a one-page-plan of how you are going to get there.
The plan should be a guide, not a rule book and stick to what you are good at. Each adaptation should be to move you back in line with your vision. You should adapt your services and operations, not your strategy.
#5 External solutions for internal problems
Keep track of what’s going on around you, what looks like it works and what clearly doesn’t. Competitor analysis and product surround tools can be great for identifying opportunities to adapt, but in its simplest form just keep track of what your competitors are doing and don’t be left behind.
Also, keep an eye on what businesses in other industries are doing. Whilst they might not be directly comparable to you, they might give you ideas which you can adapt and apply.
How we can support our clients
MHA Carpenter Box can provide the guidance to help review your business, provide advice on accessing support and assist with identifying options for cashflow needs.
We can provide support for your business strategy, including preparing forecasts and projections to assist with decision making, and applying for financial support where needed.
For more information, please visit www.carpenterbox.com or call 01903 234094 to get in touch with our friendly team of advisers.