Business Advice

How to spring clean for a more resilient business

- September 5, 2023 3 MIN READ

With some experts predicting a period of slower growth for the Australian economy, many businesses are bracing for a decline in consumer spending. Whether they experience a decrease in demand for products and services or not, Australian businesses should look for every opportunity to maintain profitability and growth, writes Scott Wiltshire – GM, Oracle NetSuite ANZ.

A ‘spring clean’ can ensure businesses are ready for what comes next. Those who focus on reducing business risk, strengthening supply chains, acquiring, and retaining talent, and unearthing hidden insights will be best placed to thrive regardless of economic conditions.

Reducing business risk

With reductions in consumer spending putting a squeeze on business, it has never been more important to have a tight handle on cash flow. A cash flow analysis can pinpoint areas where the business might be spending more than it needs to and highlight areas to dial back costs. With hybrid and remote work now the norm for many businesses, some might consider moving to a smaller office space in order to reduce rent overheads. However, every business is different, and each company will need to consider the best path to cost reductions.

Keep in mind that cost reductions are not necessarily a predictor of success. Start by reviewing which business services are most attractive to core customers and use these to guide where reductions in spending make the most sense.

Say goodbye to the weakest link (in your supply chain)

In a tight market, every customer and every sale makes a difference. Businesses need to optimise inventory levels to control costs while capitalising on customer demand. To achieve the right balance of inventory, improve agility, and reduce supply chain risk, businesses should re-evaluate suppliers to identify vulnerabilities and minimise the risk of disruptions. They should ideally diversify suppliers by ordering their materials and components from multiple vendors to add redundancies that mitigate the risk of disruption.

Using an integrated business management suite that stores supplier information within a central database can make it easier for business leaders to keep track of supplier relationships and assess risks. With vendor scorecard functions embedded in business systems, companies can easily track supplier performance and such functions can assist in quickly identifying risks within their supply chain. 

Clean up processes to retain top talent

The cost of finding and onboarding new employees is one that many businesses would like to avoid. But, with job mobility still at a 10-year high, companies are finding it increasingly challenging to retain talent and maintain operational continuity. At the same time, they are challenged with better support for remaining employees every time somebody moves on.

Eliminating cumbersome processes and tedious workarounds can improve employee satisfaction while opening up opportunities for them to engage in more satisfying and purposeful work. Taking this approach helps employees feel a stronger sense of belonging within the business, thereby reducing turnover and the costs associated with recruiting new employees.

Start by looking at time-consuming tasks and those prone to human error, and consider which of these could be automated. For accounting this could include accounts payable, accounts receivable, payroll, expense management and the monthly financial close, among others.

Unearth hidden insights

Taking the time to revisit business practices and make tweaks in response to external market pressures can help you uncover new sources of income.

With real-time financial insights, businesses can discover opportunities for additional revenue through upselling or cross-selling, and other ways to improve profitability. Collecting information about a customer’s sales history may reveal alternative or complementary products that can be offered. Alternatively, reviewing the profitability of products or services can help leaders decide where to focus their production and marketing efforts. Approaching this both ways can be useful to create additional income, regardless of market conditions.

While the economic landscape remains challenging, there’s still plenty that businesses can do to streamline processes and enhance profitability. Re-evaluating business costs to reduce the risk of cash shortages, strengthening the supply chain, retaining skilled staff, and using insights to create more revenue are just a few of the ways that businesses can build resilience and more importantly, thrive.

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