As we start to ease into the world of remote working, now is the perfect time to sit back, take stock and reassess your business. This could be a once-in-a-business-lifetime opportunity for you to devote attention to your overall business plan without the distractions of everyday life.
In this post, we’re going over the ways you can review your business model, plan for the future and implement ideas that will future-proof against any similar issues down the line.
Let’s take a look at some areas to address.
Review your business model
When the country went into temporary shutdown, you might have noticed some cracks in your business model which meant you weren’t able to pivot into online working as quickly, or as smoothly, as you’d hoped. Almost all businesses get caught out somehow, but instead of seeing this as a bad thing, let’s think of it as an opportunity to improve your model and future-proof your business for other unexpected scenarios.
We’d recommend reviewing the following key areas and thinking about how best to restructure them:
What could you do better enhance your customer relationship management?
Your customers are the most important people in your business, and in the midst of a financial crisis and a pandemic, they’ll need ongoing assurance, support and guidance from you to help them navigate the coming weeks and months. So how can you reassure them, make their lives easier, and make them feel valued?
Sales & Revenue Streams
Are there any customer segments that you hadn’t targeted previously which would have been able to provide you with additional revenue streams? How can you target them moving forward?
Is your way of generating revenue the most efficient and profitable way for your business to receive its income? Is your pricing structure correct? Are you making the margins needed?
Stakeholders (Key Partners)
Were you fully away of who the key partners were that you needed to execute your business plan?
Do you have a buying strategy in place to obtain products, materials & stock from suppliers? Was this systemised for all of your team to access?
One of the key partners in any business is your bank. Do you have any issues with your business banking? Could you review your banking relationship and explore better alternatives?
If you’re currently with a traditional bank but looking to explore a fully digital banking service, check out this blog post we wrote on challenger banks and whether they’re the right choice for you.
Suppliers & Costings
Are your suppliers geared up to provide you with a solution during this time? Perhaps you need to address this with them or seek alternative suppliers.
It’s amazing how quickly you realise things aren’t necessary when there’s no revenue coming in to cover the payment! Do you currently have any unnecessary costs you could cut?
Are you making the most of supplier rates to maximise your profit margins? Make sure you review costings against similar suppliers.
This list is non-exhaustive and also very open to discussion. You could (and we do!) spend hours working with clients on fine-tuning their business models. It’s an iterative process which should regularly be reviewed to improve your business model and better meet the needs of your customers. One point to remember, though, is that minor changes can cause a domino effect throughout your business, sometimes good, sometimes bad, so it’s important to consider and test the cause and effect of all the changes you make!
Cash Flow Forecasting
Now that you’ve reviewed your business model, it’s time to put some financial data behind it. Are those new cost saving measures really going to stack up to additional profit? Do those new revenue streams that you’ve built infrastructure actually provide a net income to the business?
One thing to remember when you’re forecasting is that it is a bit of a dark art! There is always guess work involved but try to base as many of your assumptions on historic facts.
When it comes to forecasting, it’s better to be slightly pessimistic than overly optimistic, because if you’re forecasts aren’t truly achievable, it really is a waste of time!
To help you manage your cash flow, we’ve created this free forecasting tool, so you can take control of the numbers and prepare for what’s coming ahead.
Stress Testing your Forecasts
Once you have a solid forecast, it’s time to stress test it!
What would happen if your sales dropped by 25% overnight, but your costs remained the same? Where would this leave your profitability and cash flow?
On the flip side, how far can you push your revenue before you need to invest in additional team members, resources, or premises? We call these kind of expenses “stepped costs” as they tend to take a big step up at one point, then flat line for a while until you need to invest again. At which point comes another step!
The best businesses will thoroughly stress tests their forecasts to make sure they can weather all storms that come their way.
One big lesson to take away from the last few weeks is that having strong and accessible systems in place can pay huge dividends when all normality ceases. Think about reviewing the following in your business to ensure they’re fool-proof for moving forward:
If you aren’t using accounting software already, now is an amazing time to ensure you have online accounting setup. (We think that Xero is the best solution, but others are available, like FreeAgent and QBO.)
Getting your accounts in shape right now will reap massive rewards in the future. It’s also one of the best ways to future-proof for your business, helping you to tackle anything that comes your way.
With Xero, you can automate everyday business tasks like invoicing, and it allows you to visualise your finances in real-time. Xero also plugs into hundreds of leading industry apps to help you streamline just about any part of your business. When you really start to take advantage of Xero’s App Marketplace, it becomes so much more than just accounting software!
Streamline your finances by using GoCardless, Stripe or Paypal to collect instant payments. This will work wonders for your cash flow, as payments will be automatically collected once their due, which also means no more time wasted chasing unpaid invoices. It’s a win-win!
Communicating with Your Team
It’s so important to have great communications systems in place so you can work collaboratively with your team moving forward. One we’re loving is Slack, an all-in-one collaborative platform for managing your team and your work remotely. You can organise your projects and conversations into channels, keep in touch with your team with voice and video calls and share files. Plus, it connects with loads of other apps like Google Drive and Office 365 to help you streamline your workflow.
Alternatively, Microsoft Teams is another great tool for managing remote teams. Invite everyone you work with to chat, meet, call, and collaborate all in one place, no matter where you are. Share files, host meetings and connect with other apps to make things runs smoothly.
We can’t predict what’s coming around the bend, but now is the chance for us to build even better businesses that can weather any storm.
Want to find out more about future-proofing your business and streamlining your business model? We can help! We regularly work with our clients to help them fine-tune their business. Just ping us a message and we’ll get back to you asap.