The last 15 years of so have been pretty turbulent from an economic point of view, and that doesn’t look set to change with the current Brexit deal / no deal / postponement / reversal / second referendum shenanigans! And throw into the mix the prospect of a possible General Election, just for the fun of it!
Don’t let the current uncertainty stop you from making plans for the future of your business. Doing nothing is NOT an option!
Economic recessions are the business equivalent to nature’s autumn and winter. It is the time things die off, cut back and regroup in order to grow again. During the boom years, successful businesses become over staffed, costs get out of control and careless deals are done, resulting in companies that, whilst looking good and profitable from the outside, under the surface are relying on constant economic growth to hide their weaknesses.
During tough times, many badly managed businesses will fail. That means there will be more opportunity for good businesses to flourish. There will be more good people available for employment, more premises to rent, more funding to be had from the banks, more customers looking for new suppliers. It’s your job as a business owner to make sure your business is ready to capitalise on the opportunities coming your way.
In my opinion, there are 3 key things that you need to focus on in the next 12 months to ensure that you are ready to weather whatever economic situation you may be faced with:
Understand your true financial position
You need to know exactly how your business is performing. For example, the profitability per product/service line, your cash-flow, debtors, creditors, operational efficiencies, sales and marketing key performance indicators. If you have delegated this task to an employee or outside agency then, make sure you understand what the numbers are telling you and review them on a regular basis. Remember, the buck always stops with you.
Know exactly where you are going
You need a vision for the future of the business, 5-10 year goal and a plan to get there. What needs to happen this week? This month? This quarter? If you don’t have an action plan, you’re going to be slow out of the gate, lacking in direction, miss the opportunities and find yourself no further forward in 5 years than you are now.
Make time to work ON the business not IN it
In order to see the bigger picture, you have to step back from the business. During an economic downturn, it is OK to roll your sleeves up and get stuck in, but if you keep on doing this, there will be nobody steering the boat and you will find yourselves on the rocks. So take the helm and start to chart your course to the future you desire.
One final thing – not all companies that will go bust when the next recession hits will be bad companies. Good ones will go as well, but only because they did not try to be better. As Tiger Woods said, “No matter how good you get, you can always get better.”
So go on, take ACTION, and ensure that your business is ready to face the future, no matter what the economic climate.