With 2020 behind us, many businesses are now in recovery mode. This year will be one of budget repair for most businesses through developing long term strategies. Here are some issues all small to medium businesses should consider to ensure their survival.
1. Build client or customer relationships
A priority as once COVID-19 hit how many businesses have had the time to do this proactively? Cost-cutting, streamlining operations, implementing new health and safety procedures were the focus. It is now time to revisit customer relationships and how to support them for mutual benefit.
If your customer base has changed, focus on building new relationships to deliver repeat business in the future. Ask yourself what the real value of each customer and the cost to you is to get them.
New customers generally cost more to acquire than maintaining existing ones. However, this is sometimes not the case. You may spend more time and money serving low-value clients, and those precious resources would be better spent forming new relationships.
1. Suppliers to have your focus
We have learnt from the COVID experience how crucial the supply chain is with resilience and diversity so important to minimising operational disruptions. Take this into account, then analyse your list of suppliers and decide if this fits your business recovery:
2. Care and look after your staff
2021 sets a new challenge regarding staff and how to retain the ones you still have. Staff turnover can be a massive cost for a business, especially recruitment, lost productivity, brand damage, loss of skills, poor fit and payouts for an employee departing.
If your staff feel appreciated, challenged, and appropriately compensated for their efforts, they will spearhead the recovery process. Weighing up the costs of that pay rise or promotion than losing one or more key staff members is essential to consider.
3. Location does it still fit your business objectives.
Many businesses embraced remote working during 2020 and now seeing that not all employees will be in the office full time. Does your current premises work with the new normal?
4. Managing cash flow
Cash flow is your key to surviving the next 12 months. Firstly, analyse how you can reduce constraints in the year ahead. Here are a few ways you can make changes to assist with cash flow.
Getting the right advice is paramount when developing long term strategies for your business. We can assist with restructuring strategies and have expertise in helping businesses through the recovery process.
For a confidential discussion of your situation, please contact our Advisory team on (02) 8304 9300.
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