Running a business can be tough. Sometimes it feels like you’re on a treadmill that’s getting faster and faster as you desperately try to keep up. The number of tasks you have to see to in order to keep things running smoothly can be immense, but that doesn’t mean that you shouldn’t take the time to plan for every possible scenario that could happen to your company. If you fail to do this, your business could end up in dire straits.
No, it makes sense to make time to plan for financial resilience and here’s how you do that:
Carry Out Regular Risk Assessments
If you aren’t carrying out regular risk assessments, you are putting your business in danger because, no matter how well things seem to be going right now, there is no guarantee that they will be the same in the future. So, sit down, take out a sheet of paper, or open up your laptop and start noting down every possible thing that could go wrong from your main customer leaving you, to you getting too ill to run the business effectively. Once you’ve noted down every single potential disaster you can think of, brainstorm as many solutions to those problems as you can think of. You won’t be able to control everything but there will be many things you can plan for and implementing a strategy for managing them will serve your business well.
Ensure You Have a Clear Business Plan
A lot of people give up making detailed business plans once they have secured the finance they need to set up a company, but this really is a disaster waiting to happen. If you haven’t planned a budget for the year ahead or worked out your marketing strategy, let alone set your team any targets, then you will be like a ship lost at sea, floating in the wind without any direction.
If you want to build a business and see it grow, you need targets and you need a plan that will help you achieve those targets. You need to make a commitment and hold yourself and others to account. It is only by being prepared and having discipline that you will succeed.
Work Out What You Will Measure
Of course, if you try to keep track of every little thing that you do, that could hold you back from doing the important stuff that will see you build a bigger business, such as developing new products and meeting with clients, so its important that you identify the most vital goals to measure, and focus primarily on them, although you absolutely will need to monitor the business as a whole to a lesser extent.
A good way to do this is by identifying 4-5 financial targets to measure and 4-5 non-financial goals to keep track of. These should be measures that show your business is doing well, or not, as the case may be, so things like your sales numbers and revenue on the financial side and stuff like customer satisfaction levels and brand awareness on the non-financial side. What works for you may be different, but find some concrete things to measure your success by and monitor them intensely.
Ensure Your Infrastructure is Protected
This is something that many new business owners neglect, but it is really important that you pay close attention to your infrastructure because if that should fail, it could take your whole business down with it. Imagine a shop with no operating cash register or an office with no working computers; even if the situation was only to persist for a couple of hours, you could lose thousands, even millions of dollars and your business may never recover. That’s why I suggest you look at this Managed IT Services Guide and consider using the services mentioned within to ensure that your infrastructure is always being well looked after. It really isn’t worth the risk.
Build a Reserve of Cash
We may be living in a digital economy where credit is readily available and money can be exchanged at the touch of a button, but the fact still remains that cash is king and having a reserve of cash that you can fall back on is probably the best way to ensure that your business is financially resilient.
It’s true that it can be tough to build up a cash reserve, especially if you are just starting out in business, but with careful planning, it can be done, and ideally you should plan to build up a reserve that is equal to around 6 months worth of business expenses.
In order to make this a little easier for you to achieve, you should make cash savings a part of your forecast. That way, the money will already be accounted for and you’ll be more likely to actually save it. Obviously, there will be times when other areas of the business really do need that cash more, but if you can save it, even if it might not be the most exciting use of your money, save it.
Be Tax-Smart
As a business, it’s important that you maximize your tax relief so that you are not spending more than you really need to. A good accountant is an ideal person to help you with this, but as a business owner, it is to your advantage that you learn about tax reliefs for yourself. That way, you will always have a good sense as to what you should be paying and where you could potentially make savings.
Build a Strong Network
Building a robust network that includes everyone from your team to your suppliers and the local community is a good way to weather any storm. If you have a strong network behind you, when times get tough, those people are more likely to step up cut you some slack and support you so that you can get back on your feet. Of course, having a strong network also makes being in business a far more enjoyable experience than it might otherwise be.
