Is your UK small business fit enough to survive through and beyond COVID-19?
As a small-business owner, you can get ahead and help lead the way out of what is going to be a longer term coronavirus pandemic created recession.
Here are 10 key rules which if you haven’t done them already will help you successfully remodel your business and succeed in the new economy:
- Identify and eliminate debt and claim Government Support (see our other posts). If your sales have dropped, you may not be able to service the debt you took on when your revenues were much higher. Any debt can be worked out, but establish first what you can afford to continue to pay.
- Downsize. If you haven’t already, reduce your headcount (by furloughing) and overhead. You can deliver the same amount — or more — by increasing productivity.
- Track your cashflow and finances daily — and start today. Install a key indicator system to track your business and have daily, weekly and monthly financial reports issued. Follow profitability per job, per week, per client, per product. Use these indicators to focus on your most profitable products or services. Do nothing that does not bring in a profit. Download our handy cashflow template here:Please complete name and email to receive this handy Tribe template.I agree with the Terms & ConditionsCommunication between us is confidential. We shall take all reasonable steps not to disclose your information except where we are required to and as set out in our privacy notice.
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- Reduce stocks and overhead at any cost. Look for items that do not move or turn frequently. That’s where your cash is locked up — in your cost of materials, labour, and so on, waiting to be turned into cash after it’s sold and the receivables collected. This can result in a huge cash drain.
- Train and cross-train your staff. If every job or task is learned by at least one additional person, when the primary person is out, the secondary person cross-trained to perform the task can leap in and save the day. And so work continues, and productivity remains high despite the absence of a key player. Smoother production, greater productivity and happier customers mean a better bottom line.
- Review your marketing and reduce spending on “traditional” media. Use the internet (how many eyes looking at this at the current time in lockdown!!!!) and focus on existing clients and customers first; get more out of them. Internet marketing will save many companies.
- Resist profit-eating sales and discounting. Don’t give away your product; instead, compete with service, quality and uniqueness. Create a niche and have a competitive advantage.
- Expand geographically if possible. Internet marketing can take you anywhere, especially if you can create an expertise or a niche item or service. Find what you do that is unique and do it as large as possible.
- Manage effectively. This means tracking and analysing key indicators, financial reports and productivity. Get smaller first and more profitable; then grow slowly and carefully.
- Focus on quality. That’s what wins in the long run. Never forsake this principle.
“Success is not final, failure is not fatal; it is the courage to continue that counts”