To better times ahead
As we prepare to leave behind a difficult year and enter a new one amid continued uncertainty over when life might return to ‘normal’, here are a few resolutions that will leave your business better prepared for whatever comes your way in 2021.
Get fit for purpose
You might think you are running a pretty tight ship, but even the best-run enterprises benefit from an occasional health check. Most of us will have taken stock of our lives at some point this year, so why not do likewise for your business?
This is particularly important if you are planning any major life changes in the near future, for example if you are thinking of selling up or buying another business or your personal circumstances have changed and you need help with a mortgage or other debt repayments.
A health check should include an assessment of the strengths and weaknesses of your supply chain to make sure you can cope with future disruption.
Prepare not to fail
When did you last review your business plan? Many things have changed over the last nine months, so the assumptions or forecasts you made around customer behaviour and staffing may no longer be relevant. In some cases your business model may have changed so much that the original plan is no longer useful.
This may sound terrifying, but it may be an opportunity to change direction and tap into new customer behaviour, especially if you were struggling before lockdown.
It also gives you a chance to think about what you want from your business. Is this something you want to do for the rest of your life?
Take the credit
Lockdown might be the ‘word of the year’, but credit is the most important word for any business. You can be as busy as you like, but if you can’t get the money in it will all be for nothing.
If you have a small number of customers and a personal relationship with the decision-makers, contacting them individually before their invoices become due might be the only credit control function you need.
But this approach is not practical for many businesses. Employing a credit controller will add additional expense, but this would have to be weighed against the benefits of getting paid in a more timely fashion and minimising bad debts – the longer a debt remains unpaid the more difficult it becomes to collect.
Funding the future
Having taken stock, you might decide that you need additional funding. If so, it is important to be realistic but confident in any application you make.
A reasonable payment plan is the foundation of any request for funding. But you also need to make sure the amount you ask for will be enough to make a difference to the business – applications are timing consuming and you don’t want to have to do it all again in a few months’ time.
And don’t forget to check the small print carefully. Even if you have received finance from this source before their terms might have changed.
Regardless of what happens next year, one of the best ways of giving your business the best chance of success is using a cloud-based accounting solution such as Big Red Cloud to monitor its financial health.
Thanks for reading our blogs this year – we hope you have found them useful. We wish you a peaceful Christmas and a prosperous new year.