1. Use your hard earned reserves to turn business around. We believe that many businesses have traded on their reserves for the past number of months in the hope that an upturn would help them trade out of the current environment. Some cuts were implemented but no real changes have been made. Well maybe there will be a pick up but hope is not a strategy.
Successful companies however are now seeing the benefit of a different approach. They have looked at where the future is and refocused by getting rid of loss making or declining businesses. They have used their reserves productively to shed stocks, people and other costs so that the business they are now doing is generating cash. Even companies that are not suffering are taking the opportunity to get back in control and gaina competitive advantage.
Message: Dont just slash and burn- Restructure
2. Shed outdated legacy. The recession may shake out many of your old competitors but the new start ups are beginning life with no baggage. Many start-ups are near virtual businesses in other words very flexible- mobile staff, outsourced accounting & reception, online and viral marketing. Your legacy could be in premises, terms of business, methods of serving customers, what you manufacture and who you represent.
Successful companies are taking the opportunity to redesign their business and combining the best of the past with the flexibility of the new.
Message: Build on your strengths but don’t hold onto the old ways of doing business.
3. Put IT at the centre of your business. The technology of the large companies is now available to all businesses at a fraction of the cost 5 years ago. Customers, Suppliers and your people can now operate remotely from each other but work and access the same systems online. Updates happen from everyones input. Salesmen update their prospects, put through orders and do call reports whilst out of the office; accounts people operate from home updating online accounts packages, MDs can review all information from wherever they need to be and communicate with everyone through same central information. The potential for reducing back office costs are very substantial whilst at the same time improving communication, and having up to date information available to all who need it.
Message: Invest in IT to restructure your business and emerge stronger than your old and new competitors.
And lastly bring this together in a business plan which has a breakeven point 20% BELOW your expected sales. If it doesn't then start again. Hoping an upturn will save your business is not a strategy.
