Are you struggling to survive the recession?
If your business’ systems & structure are solid; you have the right team on board and you have your cash flow under control, there is every chance you will survive a downturn or recession.
At the height of our recession, many small businesses focused on surviving, which is hardly surprising. Some economic & business confidence surveys have recently shown that confidence is starting to increase for many small New Zealand businesses.
For businesses suffering with “poor financial health” (generally when liabilities exceed assets) recovery and adjusting to market place realities as well as seizing emerging opportunities is not easy.
I have put together these 7 tips to help your business develop:
1. Stem the flow by immediately addressing any worsening position and seizing control of your cash flows and short term lending. It begins with you identifying ALL of your cash flows (both incoming and outgoing) and determining the nature of those cash flows. Where possible, minimise your cash outflows until you have developed a “recovery plan”. Consider using short term lending as a way of bridging or filling any gaps.
2. Lead. Re-evaluate your “people needs” (or “human resources”) and ensure that you have the right people filling the right positions in your business. Challenge the status quo and ask your staff to prove their value to you.
3. Focus on strategy. An essential ingredient to rejuvenating your business is your strategy. Where will you focus your efforts? What markets will you target? What opportunities will you exploit? How will you resource your recovery or expansion? If you don’t know where you are going, how will you know when you get there?
4. Assign accountability. As soon as you have decided on your business’ strategies, you’ll need to develop the right environment to make it happen and you’ll need the right people to help you make it happen. Establish new job descriptions for your team and make them more accountable for day to day results. Align their objectives (and pay structures) to your business’ objectives.
5. Cost re-engineering. Take the opportunity to fully evaluate your business processes. Look for ways to reduce cost (without compromising service delivery), increase your sales and improve quality and efficiency. Identify your core business processes and look for ways to run your business more effectively and efficiently.
6. Debt re-engineering. List your debts and liabilities and separate them into short term and long term arrangements. Consider approaching your creditors and lenders and work out if it’s possible to renegotiate their rates or terms. Consider using short term lending (temporary overdrafts, for example) until your cash flow and profits stabilise and return to some predictability.
7. Communicate with key stakeholders. Regularly communicate with your business’ key stakeholders. Keep them up to date to prevent them being caught by surprised or off guard
So, as you can see, by making a few minor adjustments to your business, you will have the right platform to survive any downturn.