The Current Business and economic environment is tough. Business owners everywhere are struggling and relying on Government stimulus to help them to persevere throughout the crisis. Keeping the door open and employees employed is a priority of the Government and there are many businesses who have weathered the current crisis on the back of Government Stimulus. Why would anyone want to run a business or perhaps more surpassing, why would anyone want to start a business?
It is accepted that we are in an unusual time and many businesses may not survive. So why are some businesses thriving? Is success in our current environment limited to suppliers of essential products for working from home?
I disagree that business that successfully survive the COVID crisis will predominantly come from industries that have had demand bolstered by working from home, panic buying, and "new industries" required to address COVID.
Businesses that were well managed and profitably run before COVID will have greater ability to not just survive, but capitalise upon opportunities that have become available to them in recent months. Conversely, businesses that were not well managed or profitable before COVID will need to make some major changes if they are to emerge as profitable and financially stronger businesses.
Just riding the economic waves and waiting for better conditions won't be enough. You have to make choices and decisions now. I'm reminded of this teaching by Dr Stephen Covey:
"I am not a product of my circumstances. I am a product of my decisions."
We all have the Freedom to Choose how we will respond to our current set of circumstances. Instead of reacting to or worrying about conditions over which they have little or no control, proactive people focus their time and energy on things they can control.
Proactive people focus their efforts on their Circle of Influence. They work on the things they can do something about: health, children, or problems at work. Proactive people make choices focused on what they can control.
So how do you make sure your business does survive and thrive?
By making informed choices to influence conditions and outcomes within your control and expanding the conditions that you can control.
These four areas will be key to managing your business through and beyond the current crisis.
Cash Flow management - review, improve, measure, monitor and forecast. Cash flow management is always critical for your business.
Planning - create and implement your action plan for the next 90 days and beyond. Include specific actionable and measurable tasks broken down into simple steps.
Taxation - ensure continued compliance, take advantage of concessions, and reduce cash leakage to tax.
Team of advisors - use the experience and knowledge of a team of highly qualified professional advisors to build a high-performance business.
Traditionally small and medium business (SMEs) owners are at a disadvantage here. When compared to larger businesses with external boards and larger departments, SMEs are disadvantaged because many do not have available the resources, skills and relevant experience to both manage and strengthen their businesses to achieve sustainable growth in profitability.
In trying to manage all business functions, business owners wear many hats. They perform many different roles and functions. Often without the training, knowledge or skill required to do them effectively. The end result is less than optimal. Time is invested in activities that do not deliver increase in revenue, profit and wealth.
To overcome this disadvantage it will be crucial for SMEs to engage and utilise resources and advisors to ensure they not only survive these abnormal circumstances, but to survive and thrive.
For a business owner, having an external advisory board to discuss direction, goals and performance, is an essential part of running a successful business.
What is a Client Advisory Board?
An advisory board is a group of advisors from interconnected disciplines working together in collaboration with you, the business owner, to work towards the goal of building a valuable business.
Benefits to your business:
- Enabling you to 'step outside' your business and look at the big picture
- Implement accountability and making sure you prioritise and make good decisions
- Providing a group of people to provide 'Wise Council"
- Offering a 3rd party independent view that helps to focus on the important issues
- Providing access to knowledge and expertise on how to implement systems to avoid tail-chasing
- Creating a Stop-Check - ie. Providing a justification to employees, suppliers and customers
- Enabling the development of a continual improvement framework and enhancing the business' reputation.
Access to a client advisory board can provide you with access to the skills, relevant experience and knowledge of a broad group of professionals working together to help you create a strong and sustainably profitable business.
At Pretium Solutions we use this client advisory board structure to help our clients achieve great success. Take the first step and discover how a client advisory board can help your business.