Nobody likes uncertainty and even the most successful business owners experience ups and downs during their journey. As a business owner and investor myself, I know you can’t predict every outcome but you can reinforce your business foundations giving you the confidence to handle challenges. Over the last 30 years I’ve helped business owners equip themselves with a set of tools and business acumen to tackle business uncertainty head on.
1. Data, data, data
Automate the tracking of as much relevant data as possible, in all areas of your business.
The greater your knowledge, the stronger your decisions will be.
Ensure your finance team is providing you with accurate actionable data, and ask them to create your ideal dashboard which is updated daily.
Strong decisions cannot be made without data.
Are you happy with the level of data available to base your decisions on?
2. Know where your cash is
Seek to really understand your finances. Understand which products/services are your cash cows and look at how the money is reinvested.
Are there any changes you can make to improve your cash availability? Are your cash forecasts visible?
3. Save for rainy days
Softening the impact of risks allows you to take more of them.
There will always be peaks and troughs, and even the unexpected events like the current pandemic.
To build a robust company you need to understand the importance of liquid assets – something you can quickly convert to cash.
Don’t take all your profits out of the business.
Be aware of the different types of business finance available you can tap into in an emergency.
Do you have liquid assets to fall back on? Are you aware of the different types of finance available?
4. Keep up with external market variables
It’s very easy to bury yourself in the day to day running of your business, but it’s crucial to be aware of your wider environment: from government policy, market trends, prices and availability of raw materials etc.
This needs to be done regularly. Set up the right tracking and feedback with your team. Schedule time to analyse your market and any changes that could affect you.
Are you fully aware of external variables that might affect you?
5. Look in the rear-view mirror
Looking back is just as important as looking forward. How will you measure your growth if you don’t remember where you started?
If you had a particularly good quarter, analyse what you did and why you think it did so well. It could be that the external environment provided opportunity or it could be a marketing campaign that reached lots of people.
Understanding what has and hasn’t worked will allow you to refine your practices and become more effective and profitable.
Do you regularly analyse previous performance? Do you know and understand what the figures are telling you?
6. Foster your employees
Your employees face challenges every day, and as your frontline they’re the best people to give you current insights.
If they raise a potential problem or have innovative ideas, listen to what they have to say. Encourage them to speak up. Garner their knowledge and treat them as your most valuable resource. Challenge them and delegate workload based on ability.
Happy employees will increase organisational performance.
How happy are your employees?
Future-proofing is the ability to predict or quickly react to changes by creating flexible practices and learning as you go.
If the market changes, your ability to respond quickly is vital to keep your competitive advantage.
The perfect strategy with each possible outcome considered doesn’t exist.
Developing flexible practices allows you to make reactive decisions with confidence.
As a business owner you need to allow for fluidity and flexibility and then you’ll be better prepared to tackle the unknown.
How flexible is your business plan and strategy?
Has any of this resonated with you?
Can you answer these questions confidently?
We can help ensure your business is future-proofed so you’re fully aware of potential problems before they cause an issue.
Get in touch for an informal chat about how we can help with our outsourced services.
Article by Darren Trice FCMA CGMA
CEO – Kaizen Consulting