It’s not a controversial thing to say that a lot has changed in a short amount of time. While some businesses have failed, many endured and others flourished, what can you say about your business’s ability to endure change and emerge cash positive?
Do you wish your business to remain agile, profitable, and relevant into the future?
“Change is the only constant” they say. They’re right on the money. There are few businesses trading today that were around 50 years ago. Fewer still that remain in the same markets with the same products and services.
If you want to weather the storms that will inevitably come your way, then you need to embrace a change-ready mindset. Here’s how.
It starts with mindset and culture
When pressure is applied, one of two things happens: you either bend or you break.
To have the ability to react with flexibility to the forces of change, you need to tune your mindset and business culture. What do you need to consider?
- Encourage employees to take responsibility and ownership.
- Invite feedback from clients and employees. Then listen to it.
- Make it a structured habit to check in with your team regularly and with efficient tools.
- Never be too still for too long.
- You can always learn something new.
- Avoid being hamstrung by avoidable paperwork or fruitless tasks.
Build strong financial buffers
Never fail to build and maintain financial buffers to protect your business from the ravages of business change. This change may come in the form of business downturns or a bright new direction or opportunity. Whatever form it arrives in, you’ll need monetary walls to buttress your business and stave off financial failure.
- Always keeping a cash reserve in a separate account. One month’s outgoings is a good rule of thumb.
- Avoiding financial overextension.
- Keeping debt finance to a minimum. You may need to engage with a fresh loan, if need be, so keep your books as clean as you can.
- Maintaining an attractive and profitable business with a solid business plan in case you’d like to seek investment.
- Pay all bills on time and avoid having a large accounts receivable ledger.
- Keeping a lean mindset when it comes to expenses.
With good planning, a lean mindset and an aptitude for conservative saving and spending, you’ll give yourself the best chances when the moment of change arrives.
Gain visibility through data
Reporting and data gathering are two intertwined aspects of the same thing – maintaining visibility over your business affairs.
Hints at what may be coming for your business can be found by undertaking data interrogation and reporting, which you should be doing anyway.
Cash flow forecasts, P&L statements, in-depth sales reporting, sales trend analysis, web traffic, social media interaction – all these sources of information tell a story. You’ll only know what this story is telling you if you spend some time listening to the numbers.
By using data, you can predict downturns, improve investment decisions, identify opportunities, and avoid unwise business decisions.
“The goal is to turn data into information and information into insight.”Carly Fiorina, former chief executive officer, Hewlett Packard.
Interrogate the consumer market
If you can’t see change coming, you can’t hope to prepare for it before it sweeps across your business.
Make it a habit to read widely and see what kinds of trends are taking root. Those that saw the eCommerce revolution coming before the pandemic hit the world, are collectively in a much better position than those who scrambled at the last moment.
For an enlightening read, see our article on major businesses that shot themselves in the foot by failing to change.
Nimble systems are key
Don’t tie your ship to complicated and inefficient legacy systems. Desktop software is a sure-fire way to remain static. You not only need to embrace nimble cloud technologies that are easily accessible anywhere, but you also need to tighten those systems and workflows to reduce drag and inefficiencies.
Make sure your systems, like inventory or payroll, can be rapidly and easily changed or expanded.
Be brave enough to diversify or reduce
Once you’ve used data, research, and instinct to identify what’s working and what’s not – be brutal and decisive. Diversify your offerings if you think a new product or service is a sound bet. Similarly, act swiftly to retire chronically underperforming offerings.
Be remote enabled
As COVID-19 has laid bare, those that can be uprooted from a physical location, work from anywhere and think globally will be rewarded with endurance.
If you can run your business using online platforms, cloud communication, use staff and resources form across the globe, and embrace other mobile ways of working, you’ll be ready for any changes you encounter.
Don’t be static. Even if things are going well for your business, constant improvement will assist in remaining so into the future.
Consistently upgrade and improve your services and products. Find better ways of doing things. Seek consumer feedback to understand how your offerings can become (and remain) more appealing and valuable.
“Standing still is the fastest way of moving backwards in a rapidly changing world.”Lauren Bacall, American actress.
Want to keep learning? Check out our article on 7 ways to stand out as a freelancer.