Businesses are vulnerable. No matter what industry you’re in, now is the time to work on building your defences, because we could be in for a bumpy ride.
While many business owners believe the worst is over, there could still be many more hurdles to come. Which means now is the time to revisit your basic business model to prepare for the future.
What if 2020 isn’t just ‘a bad year’? Should the current business climate continue for another 12 weeks, months or even years, will you cope? Here a few business hacks to ensure you are as resilient as possible.
Cashflow is the oxygen of any business. It is your business’s beating heart and blood - and there is a lot of it available. Without cash, not only are you trading on a thin tightrope, but you are as good as gone as soon as a crisis hits. Get into the habit of harvesting cash even when things are running smoothly, because in truth, you can never have too much.
At King Kong, I aim to have a minimum of 12 months cash available to survive with no clients at all.
A business’s ‘sink or swim’ factor will really boil down to their ability to keep revenue coming in, and keeping the cash register ringing at high enough volumes, with big enough margins, to sustain any hardship the business may suffer.
Cashflow, especially in times like this - when people become looser with payment terms and deadlines - enables a business to be on top of those things, essentially slowing the ripple effect and damage extent. This is especially important when a business is faced with decisions such as making cuts to services and staff.
When the purse strings are tight, it is inevitable that cut-backs will happen, but to make these as least damaging as possible, a healthy cash-flow will act as a buffer to both you and your employees. If you review the reasons why a business failed or folded during a recession, it is because they ran out of funding, with an inability to generate new money - it is as simple as that.
Wise capital allocation is also crucial to your business success. Now is the time to address what capital you have, where it is, and if it is working to its maximum capacity during these times. It may not be enough to simply have 12 months of cash in the bank for your organisation: Consider if you should reassess where you are currently deploying additional capital and value, and make some changes.
Is your cash sitting in an account with minimal growth opportunities, and could it be working harder for you? Are you still investing in the same advertising, knowing full-well that the market has changed? If so, reassess your advertising and marketing strategies. Analyse the ROI of these investments and make detailed comparisons to three, six and nine months ago. Ensure your ROI is still worth that spend.
For example, could you re-address your advertising strategy and pivot these spends into other channels that can create more growth? Look at the market shifts and analyse competitors for inspiration here, too.
Also look at the accounts where your money is held. Consider that after inflation, if the value increase is low, you may even be losing money while your savings are stationary. Now is the time to take a microscope to the assets that you have, make them work for you, and make better, more informed decisions on how the value of these assets can grow in your favour.
As a business leader and as a means of defence, instead of ploughing my efforts into saving as many clients as possible, which we obviously do, we also look at bringing on as many new clients as possible too. At the same time one business may be struggling during this process, there is another that will need to pivot, or even use an uncertain ‘predicament’ to reassess their business structure and evolve. There are a lot of people out there in the marketplace, and many business owners in many shapes and forms - it is crucial to take advantage of that.
One thing so many businesses fail to recognise is the importance of revenue retention, as well as creation during a crisis. At the beginning of the pandemic, and during, instead of cutting back we actually increased the number of meetings held between our management teams and account managers to ensure they were getting ahead of any potential issues with clients, continuing to secure results, as well as educating them on any upcoming changes. This helped them to get ahead of their clients who might be thinking to pause or are feeling uncertain about moving forward. It enabled us to breed confidence in our services, rather than doubt.
COVID-19 is dominating and may continue to dominate the headlines for some time. But it is one of many factors contributing to reshaping the future of all businesses, and the way we work this decade.
Factors that existed before the pandemic, such as competition, system mistrust (hello, Google, TikTok and Facebook) trade disputes with China and our quest for ‘Net Zero’ were all existent before, but have been magnified as a result of the pandemic, and will continue to ensure we are consistently needing to make adjustments to our business models. Put simply, the pandemic is not the only battle you will need to fight over the next few years.
Without risk of throwing yourself into doom and gloom, it is important to take a step back from your current business situation to first gain some perspective, and avoid falling into the habit of blaming one single event, such as the pandemic, for the collapse or set back of your business. It may have been a deciding factor but claiming ownership will better help you to deal with the situation in hand, to make more concise decisions moving forward.
There will always be problems facing your business, this is not the be all and end all. Approaching each hurdle as an opportunity to pivot and grow will result in an overall stronger business structure, and attitude ongoing.
As our customers exhibit growing desire to be recognised for their preferences and passion points, ...
In the third and final episode of our 3-part CMO50 video series exploring modern marketing and why it’s become a matter of trust, we’re delighted to be joined by Telstra’s former CMO and now digital services and sales executive, Jeremy Nicholas, and Adobe VP Marketing Asia-Pacific and Japan, Duncan Egan.
Flash back to the classic film, Willy Wonka and the Chocolate Factory. Television-obsessed Mike insists on becoming the first person to be ‘sent by Wonkavision’, dematerialising on one end, pixel by pixel, and materialising in another space. His cinematic dreams are realised thanks to rash decisions as he is shrunken down to fit the digital universe, followed by a trip to the taffy puller to return to normal size.
Why is it there is no shortage of leadership development materials, yet outstanding leadership is so rare? Despite having access to so many leadership principles, tools, systems and processes, why is it so hard to develop and improve as a leader?
As a nation united by sport, brands are beginning to learn money alone won’t talk without aligned values and action. If recent events with major leagues and their players have shown us anything, it’s the next generation of athletes are standing by what they believe in – and they won’t let their values be superseded by money.
