An uncertain world – how do I cope?
There is no getting away from it – we are operating in an uncertain world! For some business owners, this will be the first time that they have experienced the challenges that a serious slow down brings and they may well be wondering what they should be doing to cope.
When things are going well average performance can be enough to pay the bills and make some profit however with today’s uncertain conditions being average is just not good enough. To prosper you need to up your game – but what can you do to ensure that you are performing to the best of your potential?
Let’s not overcomplicate things here… when the ground rules change you need to go back to basics and ask yourself questions in three key areas:-
Market - if the market for your products or services has changed drastically you will need to find out if you can diversify into other market sectors or whether you can target different customer types. If you are able to adapt to new market sectors and customer types then you will need to consider whether you need a different marketing and promotional approach. What will be the impact on costs and selling prices for this new approach? Are you able to recover the impact of rising costs or are your margins being squeezed? If you consider offering discounts be aware of the impact on profitability, will the discounted prices bring the necessary increase in volume to maintain or increase profitability?
People - in today’s world people can be the key differentiator so you need to know if your people are fully equipped for the challenges ahead. Do they understand and fully embrace the values and goals of the business? Do they have the necessary skills and knowledge required to be the best? Are they communicating effectively with all of the stakeholders of the business? If your review of the market shows that you have no other option than to reduce costs and, if this means redundancies, then you will need to take specialist advice to ensure that you not only comply with employment legislation but that you also do the best you can for your people.
Cash - revise your cash flow forecasts based on the information that you have gained from your market review. Review all of your costs and carry out some “what if” forecasts to enable you to have realistic projections for your ongoing cash requirements. Remember that funding providers (whether banks or investors) dislike surprises – make sure that you approach them with all of your research before you need the additional funds.
None of the above is rocket science however it can be too easy to ignore the basics, cross your fingers and hope for the best. Once you know the reality of your current situation you can then take the necessary action to move forward. By preparing your business to succeed in tough times you will be able to reap the rewards when things improve.
Taking on a Business Coach helps businesses to reach their potential – even in difficult times.