Reboot Your Business Back to Basics
Businesses now live in a “new normal” which will continue to evolve rapidly, so all business leaders must now think carefully about what they should do to strategically meet the new risks, opportunities and challenges so they can succeed. A business mentor can be invaluable for this, providing different perspectives that might otherwise not be considered.
Business leaders must think about the following:
- Where is your business now compared to where it needs to be?
- You need to map out the past strategies, mission, values, capabilities, products and services, key relationships with all key stakeholders: customers, suppliers, staff, financiers, community, industry, governments, etc.
- Compare to where you need to be to survive and thrive in the new environment, and find the gaps
- These gaps need to be prioritised and the steps to fill these gaps need to be established
- Filling in these gaps in priority order will underpin the success and survival of the business. These gaps should be implemented within a process of getting back to basics
Getting back to basics will allow for a considered, compassionate and responsive approach that adapts the business to needed changes, while still focusing on commercially strong leadership that every business needs now. Whether you have done well or badly through the COVID-19 epidemic so far, chances are you need to reset the organisation to get it back on track and be responsive to the changed business and social environment. Getting back to basics can energise the leadership and the business, enabling you to make necessary changes while focusing on your priorities. This approach should help businesses adapt and be better able to manage the uncertainties ahead in their business and social environment.
The evolving business environments are driven by:
- The need to adapt businesses rapidly
- Meeting challenges in:
- shifting demand patterns
- increased emergence of competitors
- operational cost structures changes
- increasing social expectations
- These trends are leveraged further by
- changes in technology platforms, systems, and processes
- increased investment in Artificial intelligence
- movements in social media platforms and advertising
- Increasing mining of data and data analytics
So, what are the basics that you need to focus on to get your business more resilient in the face of increasingly risky business markets and environments? Our business mentors share what you need to know – read on to learn more.
The Four Starting Areas to Getting Back to Basics
- Set and stick to your priorities
- Take a hard look at your financial results
- Streamline and focus all systems on the top priorities
- Connect with your stakeholders and deepen relationships
Many businesses engage with International Business Mentors to get a business mentor or coach. Business mentoring can assist you in asking the right questions in this process to address the pressing strategic issues in your changing business circumstances.
Back to Basics 1: Set and Stick to Your Priorities
What are your 5 to 7 top priorities? These will depend on your specific business, the challenges you face in your business and what ultimately makes your business succeed. For example, for a consumer products and services company facing stiff opposition, these top priorities might be:
- Keep your best customers loyal
- Focus on quality of products and services and improve customer care
- Improve the transparency, online channels and reliability of delivery
- Get honest feedback from customers on products and services
- Ensure all staff are customer orientated
- Continuously improve delivery of products and services
- Ensure a good response from all key customer groups to advertising, social media and promotions
- Invest in image and brands
Anything not in the top priorities drops down the to-do list in Back to Basics 2 below:
Back to Basics 2: Take a Hard Look at Your Financial Results
Consider what you would do if in a couple of months’ time you had three months of effective shut down.
- Calculate just how long the business would be able to continue until cash reserves or borrowing ability are gone
- Which costs can be reduced immediately? Without impacting the priority areas.
- Where are you profitable with good net cashflow? These are the areas to increase. Where there are negatives? Limit these areas.
- Where can you generate cashflow immediately?
- Are there any surplus assets that can be liquidated?
- Can you get paid faster by customers and can you pay your suppliers slower?
- Can you reduce stock levels, or in a service business reduce the length of time of work in progress?
- Are there projects or investments (including Capex) that can be shelved until cashflow improves?
- Only invest if the cash payback is very short-term, say 3-6 months
- Are the cashflows being used to support the top priorities? Limit low priority areas.
- Are your leaders and staff working productively, efficiently and cooperatively on the priority areas of the business?
All of the above seeks to focus attention on the financial performance of the business to improve profits and cashflow. Keeping debt down and deposits up in an uncertain environment makes sense, but only as far as the top priorities are being met, facilitating the success of the business in its markets.
Back to Basics 3: Streamline and Focus All Systems on the Top Priorities
Critically look at the process that deliver your products and services to your best customers and ask the following questions: