Even though we seem to have been bombarded by extraordinary political event after event over the last year or so, the result of a hung parliament still came as something of a shock to a lot of us.
What should you do? Sit tight and cling to the hope that the political parties will sort their act out, pull together and negotiate a great Brexit? That the currency markets will settle down? Or take the opportunity to protect and strengthen your business in the areas that you CAN control? Why not future proof your business?
We’ve worked with businesses to help steer them through downturns and have put together some pointers in two key areas that you should address for your own business during this period of political and economic uncertainty.
Forecasting for your business is even more important than ever. It’s precisely because we don’t know what future holds that you ought to be considering different scenarios. Have you considered how your business would cope if you lost your major client? Or if sales decreased 10-20%? How can you future proof your company against the unexpected?
We’ve been working with clients using the latest tech (Futrli) to come up with forecasts based on best/worst case scenarios, helping them to prepare for any eventualities. We’ve looked at both general KPI’s such as revenue growth, gross margins, bank balance and elements specific to their industry sector to give them a far clearer picture on where their business is headed in the medium-long term whatever the political or economic climate.
It’s not only real-time data which flows from XERO (so there’s no more reliance for them on monthly manual spreadsheets), but it’s also freed up management time for our clients so they can focus on growing their businesses. Win-win!
2. Keep your cost base down
No matter what the impact of external events on your sales or pipeline, you’ll still have to pay the bills.
It will probably be useful to separate your costs into essential or “can’t avoid” costs while balancing the need to invest in activities which will help you provide the best service or product you can for your customers.
Ten ways you can reduce your business costs:
• Embracing innovative technology throughout your business (e.g. automated tech services for accounting, web hosting, marketing communications). It may involve an initial steep learning curve, but should reap long term benefits with lower costs, make your systems more efficient and provide competitive advantage, especially if you’re an early adopter.
• Becoming more efficient – eliminate unnecessary manual or high cost stages in processes that take up employees’ time.
• Listening to customers – not wasting time providing or marketing products/services that are not valued by customers.
• Shopping around for better deals with your long-term suppliers (telecoms, utilities, internet).
• Investing in virtual working and using collaborative working tech.
• Outsourcing or offshoring – consider more flexible options – especially for services such as your admin, marketing or advertising.
• Cross-training staff so you never have skills voids when employees leave.
• Cutting out services/subscriptions that you no longer use.
• Paying invoices on time to avoid late payment penalties, or even negotiate better terms for early payments.
• Going greener (cut down on paper printing, use energy efficient lighting).
Our advice? Don’t bury your head in the sand! Future proof your business!
Try to view the current uncertain political climate as a great opportunity for your business to set the bar higher and reshape your customers’ expectations. By marrying a strategic forward-looking forecast plan with improving your business efficiency, you can put your business in great shape ready to handle a downturn AND steal a march on your competitors.
At Square Mile, we’re committed to helping our clients get the best from their finances and get them in the best shape for whatever the political and economic future brings. Our tax, accounting and advisory experience means we can give you the planning insights and advice necessary to adapt to future change. Plus our tech expertise as a Xero Gold Partner has helped clients set up and customise their online accounting systems, saving them valuable time and money in the long term.
If you’d like to future proof your business, please get in touch with us. We’d love to help.