By Jackie Marriott, Jackie MarriottPrincipal
23 August 2021
With the unprecedented financial year that was 2021, many owners are questioning how they can position their business to not only survive but thrive in an ever-changing environment.
Whilst some businesses have faced an extremely challenging 12 months of trading and intense struggle, at PKF we have been fortunate enough to see entities thrive in their new environments and quickly pivot their products and services to a new market. How have they done this? Through planning.
So with the new financial year upon us, now’s the time to catch your breath, reflect on how your business has fared and determine what strategies you can implement to set yourself up for a successful and prosperous 2022. It’s easy to fall into the trap of just ‘keep on keeping on’ but taking the time to focus on this important exercise can highlight weaknesses in your business and reset your goals for the next 12 months and beyond. Questions to ask yourself include:
- What did you implement in your business that caused a positive impact? Can you take this forward into future trading?
- What struggles did your business face?
- What could you have done to pre-empt this?
- Did your competitors do something different to you and what was the outcome?
- Which of your people shone through the tough times and what can you do to reward and retain them?
- What can you implement now and who is responsible for this action?
- Who do you regularly get feedback from and how is this obtained?
One of the biggest struggles most industries faced through COVID was cashflow. With the removal of government assistance, many businesses may now face a more drastic strain on their cashflow than ever before. Things you can implement now to avoid issues in the future include:
- Set a realistic budget/cashflow forecast for the 2022 financial year
- Find out what your break-even point is and have all members of your sales division understand these base targets
- If the forecast reveals that you will go into negative cash at some point – speak with your banker now to set-up the necessary funding. Even if you don’t end up using these lines of credit, you are assured it’s there which might well avoid some sleepless nights!
This exercise relates to just one of the many stressers owners face, but it helps identify that you can get in front of a problem before it becomes an issue, in a few easy steps.
Taking the time to sit down and whiteboard the above will show up not only issues you may have forgotten about, but it will also highlight the positives that came out of COVID. This might include a new market you have not targeted before, an employee that really stepped up and showed their worth to the business, or even that your business faired much better than your competitors. You can then build on these wins i.e. moving your marketing resources to target these new customers even further or giving your gold employee that promotion and recognition.
At PKF, we specialise in completing strategic planning sessions that focus on the reflection exercise above. If this is something you would be interested in discussing with us, please get in touch.