For well-advised and prepared businesses, business resilience strategies are in-built. It should always be assumed that at some stage during business life, circumstances will serve up challenges that cause set-backs from which the business will need to recover. Here we outline the business basics that bolster business resilience and enable businesses to bounce back following adversity.
In the simplest of terms, business resilience strategies are those that enable a business to weather the storm and recover quickly to return to profit as conditions improve.
There is no denying the Coronavirus pandemic has caused business disruption, with some thriving businesses failing in a few short weeks, while others have experienced record activity as demand for their products and services suddenly exploded.
As we move into the so-called ‘new normal’ there are business practices that are not only mandatory for recovery, but necessary for adapting to evolving business conditions.
Early in the year when COVID broke, clear and regular communication and decisive decision making by business owners was required to prepare for what was to come. These attributes, while often taken for granted, underpin sound business management necessary for all stages of a business.
With ongoing impacts to consumer and community confidence, businesses will need to remain in close and effective communication with their employees, clients and suppliers. This will build trust and with trust comes loyalty.
Further, while ‘business continuity planning’ was vital in those early weeks of COVID, it should always be considered a necessity to ensure the business remains viable, able to make the most of opportunities, grow and be profitable. In fact, the pandemic shone a light on many businesses who did not have adequate planning in place.
The very nature of financial projections and modelling is to indicate outcomes should variables change and provides opportunity for contingency planning, which is key to building business resilience.
Business resilience strategies include reviewing what you’ve got and making it better – cutting the fat and building the muscle.
We recommend regular business walk-throughs and proactively looking for opportunities to improve or tighten up processes. Reducing waste in both time and resources will very likely have the positive knock-on effect of increased efficiency, productivity and profit.
Regularly review your critical expenditures by scheduling it in your calendar and making it a normal and habitual business practice.
Know your key suppliers and review their quality, pricing, limitations and advantages often. Avoid monopoly situations and implement competitive solutions that enable ongoing supply of materials should one source of product suddenly dry up.
Equally know your customers and remain abreast of what they want from you. Emerging trends and changing attitudes can impact directly on product demand. There’s no point persisting with a product line if your sales data indicates your customers no longer want to buy it. Equally important is reviewing your payment terms. Have they extended from 30 days to 90 days? Are you sending invoices on time and are you chasing up late payments?
Proactively managing your teams is a key characteristic of resilient businesses. The recent pandemic placed the spotlight firmly on how and where teams work. Businesses with sound internal communication and strong technology were able to mobilise their workforce quickly to working remotely while having strong HR processes in place enabled them to deal with difficult matters such as staff displacement.
Prepare budgets and forecast your cash flow by planning your cash position – weekly, monthly, quarterly – to best suit your type of business. This will enable you to make financial decisions with confidence and capitalise on opportunities. It will also allow you to keep adequate cash reserves or make arrangements for fast access to finance should you suffer an emergency or to see you through quieter times.
Conscientiously attending to what are essentially business basics and adhering to the well-worn adage of working on your business rather than getting stuck in it, contributes to a financially sound and resilient business.
For assistance with financial reporting and management or to discuss any of the matters raised in this article, please contact Rosenfeld Kant on (02) 9375 1200 or email gary@roskant.com.au, raul@roskant.com.au or elias@roskant.com.au
Partnering with you to deliver efficiencies, growth and success for your business.
The information (including taxation) contained within this article is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Rosenfeld Kant strongly suggest that no person should act specifically on the basis of the information in this document but should obtain appropriate professional advice based on their own personal circumstances.