In these challengng times small business owners must learn to manage risk and ensure that their firm survives. Here are some top tips to this effect:
Lead with confidence and flair
In any recession there will be a feeling of insecurity and negativity amongst your staff based on the perception of the world around them. This is where your skills as a leader are most needed - to lead with confidence and flair. As a business focus on what you do best and keep doing that. Your products and services are your key point of differentiation - keep focusing on them and innovate for future growth. Don't be swept up with negativity. One of my colleagues told me she had stopped reading the negative stories in the media. She knew we had great products and services, and was going to focus on that. I saw her again a few weeks later and business is thriving. Whatever market you are in, focus on the positivity - optimism flourishes success.
Treat cash flow as king
In any business you need to be cash positive and this is equally so in recession. There will be challenges with some of your suppliers and customers. Catch concerns early. If one of your customers is late paying, make appropriate arrangements. In tough times think through all the possibilities and define a risk profile for customers and supplier relationships that enables you to have early conversations and you can plan accordingly. If you think you need extra funding plan ahead before the emergency happens. Furthermore, if you have never been through a recession talk to people who have. Find a mentor - talk to the bank or external accountants and talk through with them different scenarios and how to manage them. We receive excellent advice from New Zealand Trade & Enterprise (NZTE) and UKTI (UK Trade and Industry) - two organisations that provide phenomenal advice and access to mentors to help companies who want to operate in different environments.
Focus on nurturing relationships
It goes without saying your customers are the most important external relationship you have. In these tougher times, your customers are likely to be suffering too. Look at how you can help them. Deliver added value for mutual benefit, for example, one of our customers set up a project with us that intended to take six months. Due to unforeseen external factors, the project was extended to 12 months. We didn't go back to ask for more money we looked at how we could stretch the project - our customers' needs and concerns were paramount. We took a long-term view to strengthen our relationship. Identify the special needs of a business and deliver practical solutions to meet those needs.
Maintain (or challenge to achieve) operational excellence
Many businesses allow themselves to become inefficient over time. This could be because they become too bureaucratic, continue to do things the way they have always done them; not embraced new technologies or focussed externally enough. But to maintain operational excellence, companies need to look at being as efficient as possible. Make sure your end-to-end business processes are as efficient as possible by taking out redundant or costly activities. For Sysdoc to grow globally we outsourced our internal finance process to BDO Spicers who provided us with support and innovation to develop and grow markets overseas.
Keep staff levels high
This is extremely important during challenging times. A motivated and enthused workforce will deliver results. There are many ways to motivate staff: give them the opportunity to innovate, create a working environment where new ideas are considered. Publicise recognition and put in place reward strategies. One thing is certain, people are motivated very differently - find out what it is. Money plays a factor but I have found that most people want to make a difference whether it's for customers, their own families or for the planet.
People are inspired by a thriving company and motivated to make a difference. Our clients love the energy and happiness of teams that work well together, are more optimistic and have a can-do attitude. Employees feel valued and feel they are making a real contribution, which brings personal meaning and a difference to their work/life balance. Our customers see it and want it too - a self-fulfilling growth model.
For more information please visit www.sysdocgroup.com
