Your Business Angels - The how, why, and other stuff to make your business tougher.
The how, why, and other stuff to make your business tougher.22.06.2023
Your Business Angels / Fresh Numbers clients are challenged every day, starting with the continuing effects of COVID, the remaking of a great culture in the business after COVID and many challenges, including Inflation and a tougher marketplace.
Join our resilience plan and survive – and thrive.
We have a bit to go with our economic crisis – So now is the time to build resilience in your business –
Now is a time to make essential changes in your attitude to money
Now is a good time to rework how you do things
High Inflation that drives up mortgages and pressures on your home and business are here for a while. Slowdowns, delays in contracts, a need to watch everyone you give credit to, and rising internal costs are not going away.
The results of working on resilience are a better business that can and will survive and a fantastic business.
|This is the boxed-in version of how long this will last.
April 12: IMF Warns of High Inflation Until 2025
Meanwhile, Australia’s consumer price increases are predicted to lower from 6.6% in 2022 to 5.3% in 2023 and 3.2% the following year. The predictions loosely align with the RBA’s estimate for CPI to be recorded at 4.75% this year and 3.5% in 2024.
Assume three more years. Longer than the pandemic
OH! And the ATO is active; they want to clean up or clean out debts.
Building resilience in a business is crucial for its long-term success and ability to withstand challenges and disruptions.
“This only can happen if you have personal budgets and have a healthy attitude to money.”
Here are some ways to build resilience in a business:
- Develop a robust risk management strategy:
a) Identify potential risks and develop strategies to mitigate them.
The starting point is stakeholders’ financial behaviour; without starting with a home budget and living it – nothing else here will work.
b) Conduct regular risk assessments.
What and who can hurt you, starting with the ATO and other significant creditors? Where have you given personal guarantees, where have you extended credit and have now a problem that needs to be managed?
What is the risk of losing staff, finding subbies, knowing how outsourcing works etc.?
c) Create contingency plans.
What’s the plan with pressure from ATO or creditors? What’s my cash flow plan and managing running costs? How could I jettison assets?
d) Establish a crisis management team to respond to unforeseen events effectively.
Who could be a lawyer in the team, know the YBA team and know how to manage personal assets?
2. Diversify your revenue streams:
a) Relying on a single product or market can make your business vulnerable.
Nature has a vacuum – Right now if you are in a profitable area of your market, the “me as well” players come in from unprofitable regions looking to get some action. They will undercut and probably do a lousy job, but they will disrupt just with a price.
You first need to assume this will happen, prepare or consider who will jump in, and then look to see what parts of the market you can successfully jump to.
b) Explore new markets.
These are businesses or folks that are usually different from those you now deal with. They may need a different vernacular but want what you have, only bigger and brighter. I note that wealthy people stay wealthy or get wealthier during a recession – are they your market?
c) Expand your product/service offerings.
This starts with an audit of what you know and can do (it’s probably a lot more than you judge) and what your current resources are capable of.
Now might be a time to buy new equipment, assess what you have and see what is possible to buy, sell, make, develop and so on.
d) Diversify your customer base to reduce dependency on a single source.
If you have just one or a couple of clients, imagine if they have a business failure. Profile your clients and even if you don’t seek new clients, find out where they are, who you would pitch to – how you would get on their side.
Increasing your revenue stream is not dropping prices and looking for more clients. It’s about opening opportunities, developing skills, and broadening the appeal to work with your company.
3. Foster a culture of adaptability and innovation:
For most of the things you do, there is a better way. Those ideas you have had, maybe they are not too weird or different and may make a difference to your business.
a) Encourage your employees to embrace change and think creatively.
Be amazed at what they may tell you (or not), but giving staff a chance to provide you with their “ya orta” may be valuable.
b) Foster a culture that values adaptability – find ways to talk to people in your industry (without giving too much away). You can adapt slowly or quickly to new market conditions and beast those still in the same grove.
Learning is a varied process of experience, adapting, trial and era and formal and informal processes. Read. Anything sometimes, you never know what will come up. You are already practising this by just running your business.
4. Build strong relationships with stakeholders:
a) Cultivate strong relationships with suppliers, customers, investors, and key stakeholders.
That can even be a conversation with the right people in a supplier’s business. Let them know how you are going and stay in touch. The “give your best price” continuous conversation will not do this.
Let your life partner know about the ups and downs, so they can encourage, support, and care for you – you must let them do this. Keep staff informed and in loops that help them do a great job etc.
5. Understand technology and new and more efficient equipment and processes in your industry: Know what these would cost (probably under finance and consider what would open to you if you advanced).
a) Take time to write business plans that can model or measure what these changes can be to your business – do you have better cash flow? Do you have a better profit? Do you move to a better market?
b) Put your head up and go to trade shows, get on things like LinkedIn and find experts in their field.
6. Maintain financial stability: Manage your finances prudently by maintaining healthy cash flow, reducing debt, and diversifying funding sources. Establish financial reserves to weather economic downturns or unexpected expenses.
a) This can only happen if you have a personal budget and a healthy attitude toward money.
b) Learn to read the accounts – and do this often. Understand the meaning of cash flow and know what needs to be put through the business.
c) Review all payments, look at all invoices – know what everything costs.
d) This is part of continuously monitoring the business environment: Stay updated on industry trends, regulatory changes, and market conditions.
e) Take a salary; that’s your money – take nothing else.
7. Develop a flexible workforce: Foster a flexible and adaptable workforce that can handle different roles and responsibilities. Cross-train employees to ensure they can step in during absences or emergencies. Encourage ongoing professional development to enhance their skills and knowledge.
8. LEARN FROM THE PAST
Remember that resilience is an ongoing process requiring commitment and adaptability.
It will be hard. We know
And the road will be muddy and rough.
But we’ll get there
Heaven knows how we will get there.
We know we will