Why do we say that Government assistance and stimulus packages are not the answer for your business? The reason is simple. They do not fix the underlying business issues that are threatening to derail your business.
While they are a welcome relief in a time of crisis, they are a form of pain relief. They ease the pain but do little to fix the real problems with your business.
All businesses face problems from time to time - the successful ones don't try to apply a little pain relief to more serious chronic problems; they get to grips with the underlying business issues that are crippling them.
With stimulus payments and once-off tax incentives, the real problems still exist. To solve and fix the underlying problems you are going to need a lot more help than temporary pain relief.
Instructions for pain relief tablets require repeat dosage and advise that, if pain persists, you should see a doctor. Why? Because if you don't fix the real problem, you're going to become dependent upon pain relief.
Just like pain medication only masks the issue, Tax cuts and other Stimulus measures for business may have a similar effect. Whilst potentially helpful, they often provide short-term relief but mask the real issues.
We can see that the benefit of a tax cut may not be very helpful in the short-term. You may not get the benefit until several months later, such as a capital investment incentive. Likewise, cash flow and employment stimulus measures still require your business to outlay the cash first. The assistance is provided weeks or months after you have made the payment.
The tax incentives and stimulus measures available, which promise to ease your pain, may not help and may contribute to greater cash flow problems as you continue to employ and incur business overheads without the benefit of improvements to profitable income.
So how can you bring long-term health to your business? What are the actions your business needs to implement for it to be firing on all cylinders rather than lying on its sick-bed?
Diagnose the underlying business issues
Just like no two people are the same, businesses are all different. They will have a variety of issues that need fixing at different times.
To identify what the main underlying business issues are, you could self-diagnose. And yes, the internet is a wealth of information. But misdiagnosis is really common. Problems with cash flow could be a result of lack of sales, poor pricing, slow-paying customers, overspending, financing costs for equipment, high owner drawings, and so on.
There are many potential causes. How are you going to diagnose it correctly - and then fix it?
I'm not a medical practitioner. So, even though I might be able to self-diagnose a problem, there is a pretty good chance I'll get it wrong. Even if I do get it right, is there something else I've missed? Is this something I can treat myself for and if I do, will it work?
The consequences of getting it wrong with a medical problem can be severe - and so it is in business.
In a medical situation, you would consult an experienced medical professional. This professional would, after gathering facts through observation, testing, and discussion with you, use their training, knowledge, and expertise to identify your health issues. He or she would know how the issues should be treated and prescribe a treatment or rehabilitation plan specifically for you.
Your business is no different. By analysing your financials and other data, understanding your goals and reasons for being in business, and using experience, methods, and processes, your underlying business issues can be accurately identified. Then, a plan to fix the problems and transform your business from non-performing to high-performing can be introduced.
With so much depending upon the financial success of your business, why risk getting this wrong?
Once you have diagnosed your underlying business issues, how should you proceed? Here are seven steps to get you started.
Step 1 - Set high-level goals and strategy
Step 2 - Determine and review the strategic success factors for your business
Step 3 - Determine the strategies, actions and milestones required
Step 4 - Review the results of your business monthly
Step 5 - Review and improve your systems and processes
Step 6 - Align your employees with your goals
Step 7 - Change the culture of your business
To be successful in the long term, you need to provide continual support and continuous reinforcement of steps 1-6 in your business. Working with a certified business advisor will greatly improve the successful outcomes from your actions.
Avoid running a business that is dependent on pain relief and government stimulus. Contact Pretium Solutions to find out how your business can achieve high performance without the need for temporary fixes.