Open for business
Now that some of the Covid 19 restrictions are lifting it’s time for businesses to come back and regain ground. A time to reset, rethink and reassess. For some businesses the fight isn’t over and hard times are still ahead but for many this is an opportunity to do business right and perhaps come out stronger and more focused. Actually for my businesses, Covid19 was a opportunity to really take a hard look at what was and wasn’t working and to plan for a stronger future. My aim is to help you navigate through this time of change so that your business can not only survive but come out stronger. I want to share with you the tips that I have learned that will help you keep in control and hopefully ease some of the stress that we are all facing as business owners.
Know where you are..
I know I have said this a million times before but the first thing you need to do in order to steer through difficult times is know where you are financially in your business and the only way you can do that is to have an accounting system and numbers that you can rely on. If you are in the hole financially, you need to know how deep in the hole you are so that you can properly plan your climb out. Your accounts need to be up to date – at least within the last week. Out dated numbers are no use to you at this time. You need real time financial information, that has been reconciled and includes everything – everything you owe and everything that others owe you. It’s time to draw a line and get this in order if it isn’t already.
Know what can work
This sounds simple because it is. You need to know what parts of your business are going to work in the current economic situation and what isn’t going to work. Look at your services, products and be realistic with your capabilities perhaps using a scaled back team.Be flexible, creative, adapt even if just temporarily so that you can keep the wheels of your business turning. Set up your chart of accounts to group different types of income and expenses so you can monitor the profitablity of different service offerings or product types. Segment your business by reporting on the profitability of different operations with in it so you can fully understand your costs. You need to get money in the door and you need to work out what is the best way to do this even if it isn’t what you are used to doing pre Covid 19.
Keep your team busy
The job keeper subsidies have allowed businesses to retain the services of employees, at least until September at which point we hope that business is back to normal. You need to keep your team busy and productive to maximise the profitabilty of the business. This might mean alternating their job descriptions temporarily. Utilise your team in the way that best suits your business at the moment rather than keeping things the way they are. This might mean changing rostered hours, moving administrative staff into the operations, or sharing staff between locations. During times like this we need to focus on the needs of the business and I’m sure the team will agree to do whatever it takes to keep the business alive. If you are one of those lucky businesses who have continued to grow throughout Covid 19, consider hiring new staff, training new employees and don’t be afraid to exapand into new areas.
Know whats ahead
To navigate your business through this time you need to be able to manage and forecast your cash flow. Cashflow forecasting helps you anticipate times where cash is going to be limited and take action to prepare for this. Identify what cash you have coming in and what cash you need to pay out . I recommend doing a weekly cashflow during these difficult times. Cashflow forecasting will allow you to see what your bank balance is going to look like in the months ahead so that you can see when is the best time to make purchases, if you need to offer your customers incentives for early payment of invoices, or if you need to negotiate with your suppliers for additional time to pay. By preparing a cash flow forecast, you are less likely to be surprised by a sudden cash flow crisis and can maintain your control of your business.Forecasting will give you a clearer picture overall of your business and how money moves into and out of it. It will show you when you do need to worry but more importantly when you don’t . ( ps did I mention that we are really great at cashflow forecasting and can help you with this if you need it.)
If you want to stay in business, now is the time to rise up as a business owner and take control of the finances. It’s the only way forward and it will make you and your business stronger as we all come out of this tough time together. Time to get on top of your business finances and if you need any help we are here. Lets open for business.