In the current turbulent economic times, businesses the world over are having to reassess their future plans and act to stabilise things.
Many recently prosperous and growing businesses are now facing potentially crippling challenges.
The good news is that, whilst a global pandemic is a new source of economic challenge, recessions and periods of economic turbulence are not unprecedented and businesses that respond, assess options and act can and will survive.
Stabilising any business takes detailed knowledge, understanding and analysis of the specific circumstances of it, but there are some broad steps that apply across the board.
They include the need to:
1. Take action
The Number One thing to do when seeking to stabilise a business is to act. Burying your head in the sand and delaying will only allow problems to get worse and create the likelihood of continued asset and value erosion.
Global leading accounting firm KPMG advises that to overcome operational and financial challenges it’s necessary to act fast to stabilise your cash and liquidity positions and assess realistic options.
There is a need to:
- Identify options
- Act to make the business steady
- Consider the possible outcomes of a range of solutions
- Implement a plan and ensure it can be delivered in full
Failing to act quickly can mean continued investment or losses on cash-depleting activities or missed sales opportunities.
2. Get creative and seek advice
Even hugely successful business and even those that work in creative sectors can become unwittingly stuck in their ways.
Traditional ways of doing things can sometimes be difficult to see past especially if fear and worry is setting in.
Reach out to the talent you have within your organisation to get creative. Consider bringing a third party in to help assess the options and move forward.
A different perspective may be exactly what is required. Small businesses may sometimes seek to cut costs in terms of professional advice but that can be more costly in the long term. Southside Accountants is one firm that promotes itself as taking pride in offering sound advice and practical solutions for small businesses.
3. Look to your competitors
Again, as a business person you’ll be used to keeping appraised of what your competitors are doing and now is not the time to ease up on that.
Whatever crisis you are facing, it’s worth seeing how others are handling similar situations or have tried to handle them in the past.
There’s a lot to learn both from their successes and mistakes.
4. Consider your outgoings
As a business owner, you’ll always be assessing cost versus reward and will naturally be adept at keeping spending focused on what reaps a short or long term return.
Lockdown has proven to so many businesses that office space is perhaps not as necessary as once thought.
Working from home may well be something we all adopt much more widely in the future. As a result, the need for offices and business units that have previously seemed vital may slip away and with it the need to pay rents or mortgages on those properties.
You may wish to consider shedding a permanent building and perhaps seeking forms of storage solution either in the short or long term for equipment or stock you need to hold on to. Cubic storage offers 24-hour access to its storage units for ultimate flexibility.
5. Downsize if you need to
Selling part of the business, reducing staff numbers or shedding some assets may be unpalatable options, but they may also be necessary.
Consider what needs to be done, assess the alternatives and if downsizing is a necessary fix, for now, act.
Whatever action is necessary, stabilisation only comes from identifying necessary actions, identifying who can perform them and moving forward with a plan.