Whatever your experience of Covid, it has taught us all something about resilience. Whether you were able to stay open and active, pivot your services, or were forced to close your doors and stop serving altogether – there are lessons to be learned from experiencing a global pandemic.
It goes without saying it has been hard on everyone, and may still continue to be for some time. But instead of waiting in uncertain anticipation for the tide to turn, we can use what we’ve learned to start building a stronger business than we had going into 2020.
There are undoubtedly some areas of your business that will need immediate attention, like your cash flow. But there are other areas that may have needed fixing or rethinking for some time – like your team, your services and your internal processes. We’re going to encourage you to think about those too.
When the going gets tough, the tough gets planning.
1. Use forecasting to be in a stronger cash flow position
We don’t need to tell you how important cash is to your business – the pandemic has reminded us all. When you have overheads to account for and payments are coming in late, stressful can feel like an understatement.
The reason accountants are always talking about forecasting your cash flow, is so you can see situations like this before they happen and plan to lessen the impact on your business (and your mental health).
With a forecast, if you spot any upcoming cash flow issues, you have time to speak to your accountant and make a plan to avoid it. This might mean taking out a loan, or targeting areas that need attention – like chasing unpaid invoices. If you leave it, it will be too late.
Plan ahead by forecasting your cash flow over the next 12 months.
- First you need to make sure you’re getting accurate and up to date numbers. You won’t be able to predict the future if you’re unable to see where you are at present. If you’re not getting your numbers regularly, we can help you get instant access with Xero.
- There are some really great apps out there to help with forecasting like Fathom, Spotlight and Futrli (don’t worry, we can help you navigate these too).
- Think about your monthly expenses and income, and any big (or small) one-off expenses you may need to pay over the year.
- Take a good look at your unpaid invoices – Have you followed up with those outstanding? Make a plan to follow up on outstanding invoices, but also ask yourself about the behaviour amongst your clients. You may want to think about changing your payment terms to better suit your cash flow (they can be less than 30 days!) or making sure that they’re properly communicated to new clients from day one.
- Make it easy for people to pay you – Xero enables you to move your invoices online and even add a ‘pay now’ button to make it easier for people to pay. This is just one step you can take to shorten the payment time frame.
2. Keep a strong team around you
As a business owner, you need to have the time and space to lead your business and focus on the areas of the job you’re great at. Of course, this involves leading the team – but the right team, in the right roles. You didn’t start your business to spend all your time picking up the pieces, fire fighting staff issues and dealing with HR enquiries.
Now is a good time to assess: Do you have the right team?
We read an excellent book called ‘Traction: Get a Grip on Your Business’ which describes a strong business as “having employees at all levels who share your vision, communicate with each other, solve their own problems, and demonstrate accountability”.
It’s not going to be a click-your-fingers change if you don’t have these kinds of people in your business, but it’s absolutely do-able. First, read this book! You’ll find an actionable scorecard in there to tell you how well you’re doing.
Secondly, think about your values and vision and whether your company lives and breathes it. Ask yourself how you might only hire future employees by those values.
Maybe you have the right team, but they’re not in the right seats? I.e. Do you have the right people doing the role that suits them best?
3. Review and strengthen your services
Many of you will have had to adjust or pivot your services to meet demands during lockdown. We encourage you to keep doing what you’re doing, if it’s what your customers really need from you right now.
These changes may end up being permanent. Sometimes when we’re forced to acclimatise, we find better, more efficient ways of doing things. For this reason, there’s no better time to take a look at all of the products and services you offer. Are they all serving you?
- What is it your clients really need from you right now, and what will they need from you once Covid is more or less over?
- What are your most profitable services and products?
- What products or services are keeping you very busy but don’t offer much profit?
- How might you make those products or services more profitable?
- How can you better promote the services that have a good profit margin?
- How can you up-sell, and move existing happy clients into more services?
If you can, use Xero to track profitability by product or service. Once you have a good idea of profitability, it’s time to ask the next most important question – are you pricing enough?
4. Match your prices to the strength and value of your services
If your products and services have changed or been added to, you may need to review the costs. It’s okay to increase your pricing if the value is worth it for your customers.
If you’re struggling with cash flow right now, you might want to review your pricing across the board. You could even look at increasing the price for an existing package or product, and look at ways to offer additional things to the client that make up the difference in the increase in cost.
- Look at the value of your offering and compare your pricing and offering with your competitors. Those additional items shouldn’t cost you very much in terms of materials or labour.
5. Build strong processes for optimal productivity
Now is the time to get your processes working the way you want and need them to, to be the most productive.
Some of us will have been forced to get online, especially those in retail businesses. Though retail has taken a hit overall, e-commerce just keeps on growing and growing. There will likely be areas of your business you can move online, or automate.
- Your finances – We’ve talked about many of the wonders of Xero in this blog alone, but the benefits are endless. Having all your finances online means knowing how well your business is performing at any given time and you can use your data to make smart decisions. We’ve made it easy for you, by mapping out the ideal process here. If you want help getting set up with a better finance system, let’s chat.
- Make the most of time saving apps – Talk to us about the apps that integrate with Xero. There are hundreds of apps designed to streamline your processes and make running your business easier.
- Your client process – Are you still using physical paper and the postal system to collect client information? Try and get these online (even using something as simple as a Google Form) or at least send these via email to your clients and prospects. This will save printing and paper costs (and the planet) and will also save on time and storage.
- Your marketing – Make sure your website is working as best as it can be for you. Get on social media. Use email marketing software. You’ll find plenty of digital ways to speed up the buying process, and many of them are free!
Stay strong yourself
Implementing these small changes over time in your business will help your mental resilience, for sure, because you’ll feel more in control.
But remember that you’re only one person. Look after yourself, and don’t be afraid to ask for support wherever you need it.
We’re always here to help.
