Unfortunately, a general feeling of trepidation lingers as we head into 2021. Make sure you remain focused on your core operations, your clients and your cash flow, writes Jim Vass.
While it would have been nice to start the year with a clean slate, unfortunately, a great deal of uncertainty around Covid-19 is still loitering around the marketplace. For many people this uncertainty, along with the sudden clusters which developed over the Christmas holiday period, are perpetuating an impending sense of ‘doom and gloom’.
But I don’t want you to think like that.
Here at ATB Partners we’re approaching 2021 on the assumption that the worst of Covid-19 is over, a vaccine is on the way, and while the post-pandemic recession is still running in the background, this period we’re in right now, is one of transition.
The economic indicators are going to fluctuate for some time, the investment markets too … We’re going to have to get used to borders opening and closing, suburbs in lockdown, truncated numbers of international visitors, no migration … the list goes on.
There’s no doubt this is irritating. It is as if the pause button got stuck.
But it’s not permanent.
So what do you do when you feel like everything is out of your control?
In my view, there are three critical areas for business to focus on in the coming months, that will not only ensure survival, but position you to leap forward, when the time comes, and the outlook is clearer.
Now is the time to assess your business inside out and from the ground up. We have a number of analytical software tools that can help with this – that can drill down into your numbers and show you the most profitable areas, or which can help you forecast future cash-flow based on past numbers.
Audit your operations. Could you be implementing better accounting and workflow management systems, financial reporting, or stock management software that will streamline your processes and communication from point of order through to point of sale? These are just a couple of considerations. What you’re aiming for is to make your business as efficient as possible. Sometimes, engaging a business mentor can help you see with more clarity.
The main stumbling block for small business growth at the best of times is maintaining a steady cash flow. In times of recession, it’s paramount to survival. Ideally, you’ll want some predictability and certainty around the timing of your income so you can meet your own obligations with suppliers, staff and the ATO. … But how can you achieve that when you’re working on a project-and-invoice-basis and sometimes clients don’t pay invoices until they’re well past due? This is a massive headache for most small and medium sized businesses, but it is solvable.
For example, many years ago, here at ATB we transitioned our clients to fixed fee services. There were multiple reasons for this. Firstly, once we’d agreed a scope of work with clients, we could set a fixed fee for these services. The transparency of the arrangement means that clients know where they stand, and we are better able to plan workflow and resourcing, so when ‘adhoc’ work comes in unexpectedly, we have the capacity for it, and our operations don’t become chaotic. The other benefit of implementing a ‘fixed fee’ service is that it enabled us to easily transfer most of our clients over to monthly payments via direct debit and this has given us greater control over cash flow.
Clients and customers
Engage with your clients. How are they feeling? What do they want and need? We mentioned in a few articles last year that when times are tough it is often a sound strategy to focus on your existing clients, rather than to spend money on elaborate marketing campaigns to attract new ones.
There are numerous benefits of staying close to your clients. For one, they can act as a ‘temperature gauge’ of what’s really going on in the marketplace, because their real experience of life can be vastly different from what we’re reading in the mainstream media, and then you can make business decisions bearing this in mind if you think it’s relevant.
But more importantly, you’ll find that when you actively engage wiht your customers and clients you can deliver better services, and more often than not you’ll have the opportunity to ‘upsell’ clients into a different product or service offering. Right now, your clients and customers are feeling vulnerable too, and if they view you as a trusted advisor or supplier, they’re likely to remain loyal, which is always better for the business long term than constant churn.
At ATB Partners, we offer a range of services from tax and accounting to financial planning and business advisory. In this critical time, it’s worth considering getting professional help, not just to ensure your business is well positioned to thrive this transition period but also because when you get professional help from a multi-skilled firm like ours we’re considering all points of view when it comes to your decisions, like where to obtain finance should you need it, or how structuring decisions may impact your tax obligations.
What’s more it can take the burden off you to find all the solutions. A problem shared, is a problem halved, as they say. So contact us, we’ll help you find the right pathway forward for your business.