There’s no doubt that the last three months have been a challenge for virtually every business, regardless of size or sector.
The team at Inspire have advice on how to ensure you get your business back on track.
We’ve all had to make significant adjustments and returning to what we perceived as ‘normal’ before, still isn’t easily within our grasp – but now is the time to get your business back on track.
With the PM’s announcement last week (23 June 2020) that lockdown restrictions are gradually being eased, people begin to return to workplaces and some industries start to trade again, we can see that the economy is taking very small steps to recovery.
With over a quarter of the UK workforce on furlough during the recent weeks, their salaries being paid by the government’s Job Retention Scheme (up to 80%, capped at £2,500), many businesses are now contemplating what the future looks like once the government’s contributions to the scheme begin to decrease from August. Undoubtedly for many business owners there have been some tough decisions already taken, for some, those decisions may still be ahead.
As entrepreneurs and business leaders know all too well, you need to be passionate about making a difference in what you’re doing and your business needs to reflect this. Now, more than ever, owners need their businesses to have a real sense of meaning and purpose, with a core team focused on helping to drive the business forward.
Remember the old adage; turnover is vanity, profit is sanity and cash is reality…in these unprecedented times, one of the absolute things to focus on is cash flow.
A detailed 12-week rolling cash flow forecast is vital, it will help you get on the right track and make sure there’s cash available when the business needs it. If your business has been closed, or experienced drastically reduced trading for the last couple of months, you may well need to think and act like a start-up again, once you are able to start trading and operating again.
Cast your mind back to the early days of your business, you needed cash to get operations off the ground, the same certainly applies now. You will hopefully be providing services or goods to customers immediately, but it’s very likely that you won’t be seeing payments for at least 60-90 days. You may also have outstanding payments due from before Covid, which need to be taken into consideration.
You should be building your financial model carefully and plan to ensure that the business will be financially viable at lower levels, if necessary, before you can start to plan for growth again. Consider the metrics and KPIs that you need to set to ensure that your business is heading in the right direction, and that the planned growth is sustainable.
Planning and preparation is important, but being agile will be the key to getting going again, even if the terrain is a little bumpy initially. You’re going to need to be able to make quick and effective decisions to help speed up the recovery of your business.
Navigating the next few weeks and months is not going to be without its challenges, but there’s lots of support available. Take advantage of your networks and the wider business community – sharing your experiences with other business leaders is a powerful way of learning and understanding from those who are likely experiencing the same as you.