Since 1984, Mark Saunders has been advising Wilder Coe clients with his expert knowledge by sharing candid experiences and hilarious, honest anecdotes. The current coronavirus pandemic has not changed Mark’s approach to handling tough topics and his straight-talking guidance. Over the last 6months, Mark has gained tremendous insight from friends, family and clients on what actions you and your business should take to survive COVID-19.
In a webinar with Westminster Business Council in October, Mark covered a few key points to help your business survive.
Don’t panic, but be honest.
Perhaps easier said than done but, moving forward, “don’t panic” should be the mantra. It is important to stay honest and remain truthful with yourself as you assess your current situation and plan for your future.
Look at your management accounts.
It’s surprising to see how many businesses do not have up to date accounts. These should be made up to last month and regularly updated. Therefore, now is the right time to focus on getting your accounting systems in order, so you know exactly where you are.
Be honest about the recoverability of the debtors sitting on your ledger, as you may not be able to guarantee that the money will come in. Therefore, it’s wise to take action and identify all your liabilities.
Once you’ve identified everything likely to hit you over the next few weeks, make sure it is in your management accounts and revise your budgets and forecasts.
You do have a budget, don’t you?
You must predict your sales and your expenses, so you’re able to work out what you need to do every month to reach your targets. Compare what is shown in the management accounts against your budget and consider how this has changed. Hopefully, you will be able to identify the exact factors that have made changes.
You can forecast your income-expenditure for the next 12 months based on what’s happening now. Although it’s not possible for you to predict when things will get better, you can maintain control by consistently reviewing and updating your expenditure. As soon as there is light at the end of the tunnel, you can begin planning for your better future.
Practice the first principles of credit control.
In times like these, you must check out your potential customers. It’s great news you’ve got a new customer or a new sale, but what if they can’t pay you?
Check credit ratings. It is advisable to do this in all cases for new clients, but right now a historic credit rating will give you the right answer. Also, get down in writing your agreement with your customer and, where possible, have a properly drawn-up signed contract in place so there are no future misunderstandings.
Also, make sure you stick to your part of the contract – invoice to timetable and don’t delay in raising your invoices. Remind your clients when invoices are due for payment a few days in advance and, if it’s overdue, then chase immediately.
You must be diligent with these matters and take action. If all else fails then use debt collection experts. There are good people out there that can do anything from general credit control right up to legal enforcement.
What is the difference between fixed and variable costs?
Take time to look at your costs. A fixed cost is one you usually cannot avoid whilst a variable cost is where you can make your decisions.
Could you renegotiate any existing contracts and get a better price for your utilities, stationery or telephones? Perhaps it is worth talking with a procurement expert or insurance broker.
Every business is different, and you may have unusual costs that don’t apply to others but be meticulous and go through each one. Can you cut anything or do with less of something?
Flipping obstacles and future-gazing
Some very clever people out there have come out with new ideas, new ways of making money and new ways of doing the same things you were doing before. For example, look at how some restaurants have adapted to survive by changing their layouts and outdoor spaces, offering takeaways and home delivery packs.
It’s the bold that take action and do well. A couple of phrases have come up in recent conversations – take heed of this advice – can you try ‘future-gazing’ to anticipate what’s going to happen in the future and how you want your business to look? Then you can work your ideas into a tangible process.
How about ‘obstacle flipping’? Instead of creating reasons why you can’t overcome your problems, flip that obstacle and find out how to get past it. Consider how many other new ways you’ve seen already in the marketplace.
Be digitally savvy
One of the biggest takeaways from 2020 is that everyone has moved online. It is a new digital world and it is a very different way of doing things. We have all welcomed Zoom into our lives, from work meetings and pub quiz nights to doctors’ appointments and religious services. It is time to learn new skills and remain visible digitally.
Keep in touch through social media and have up to date profiles online. In many industries, we are now seeing surprise online collaborations, which has changed the way we do business.
You must understand the new, clever ways you can collaborate with people. Are there online tools that will make your business more effective?
Be bold and take action.
If you had a blank piece of paper to restart your business, what would it look like? How could you improve operational efficiency? Do you understand your place in the new market? How have supply lines changed?
This is a chance for new opportunities. There are lots of people starting new businesses and taking advantage of the current situation. Taking action will make you feel better as doing something to move forward is a positive step.
Want to talk through your plans with a trusted advisor? Then reach out with your questions and get in touch with Mark.
You can also catch up on the full webinar session here.