COVID-19 and the new financial year provide an opportunity to reassess and make changes to your business’ strategies and plans to make sure you are offering a sustainable value proposition that is relevant for customers, staff and the community, writes Leo Tyndall, CEO and founder of Marketlend
With COVID-19 negatively impacting two-thirds of businesses across all sectors, 2020 has been one of the unprecedented challenges for SMEs and corporations alike. Many businesses face similar key challenges, including retaining business and customers and managing costs to remain financially solvent.
Here are my top tips for businesses to consider for effective planning around the new financial year.
Business owners must first understand and review the company’s financial position. Accountants are valuable assets and can help you at every stage of your business journey. Outsource an independent accountant to do an in-depth analysis of the business’ finances and prepare for tax return. Based on the information, business owners can gain a fresh perspective of the business’ expenditures and help plan accordingly for the short, medium and long-term future.
Another way to assess finance is by creating a strategic budget. It’s an essential tool to use as it predicts the financial implications for the upcoming year and may present new opportunities for business growth. The budget should include financial forecasts including profit and loss, balance sheet and cash flow statements.
Reassess strategic plan
“To be successful and achieve growth, it is important to plan ahead. Review the business’ short-term and long-term goals and evaluate the current strategy to see if they are aligned. Undertaking a situational and SWOT analysis can be of use, especially if you leverage customer’s feedback (ideally through data collection). Customer perception of your business, and how relevant you are to their needs will impact on business survivability and growth in this current economic climate. From there, you will be able to identify gaps in your product or service offering. Feedback will be the starting point for developing solutions to meet those needs. The key here is to be flexible with your plan so your business can adapt to any changes in the environment and make the most of potential opportunities. As SMEs, we need to know where and when our money will be spent. Knowing that you have already put aside money, or have pre-planned access to funding will help you take advantage of opportunities without financial guilt or pressure.”
Review technological processes
“Adopting new technology is usually not a priority for business owners. However, in the last three months due to the global pandemic, we have seen monumental changes in how some companies are using software for remote workforces. Continually adapt and make incremental changes by using updated technology to streamline your processes.
As SMEs we want to reduce stress, improve working methods and save time. E-commerce platforms can help track customer and Customer Relationship Management (CRM) software can enable you to track profitability and automate some business processes. There are many options available so take advantage of the free trials and live demonstrations to really test systems out. If technology is not your thing, don’t let it stop you, have someone who has the interest to try them out. It is clear from the rapid changes that had to be implemented due to COVID-19 that businesses need to be prepared and have systems in place for the future.”
Utilise a sustainable cash flow option
“For small and medium-sized businesses arm wrestling with cash flow, consideration should be given to options accommodating both immediate and long-term support. UnLock is a business-to-business (B2B) ‘Buy Now Pay Later’ method that enables SMEs and suppliers to improve their working capital to have financial flexibility.