From a health and economy perspective, 2020 has been a shocker. For some business owners the disruption has been stressful and expensive, while for others business has boomed.
If only we’d had 2020 vision, but as the saying goes, clarity is in hindsight. Here we look back at the year that was and the lessons learned that can make businesses stronger and more resilient in 2021 and beyond.
In March this year, we quickly contacted our clients and others in our network for two key reasons. The first was to provide reassurance that we were available to provide advice and support. The second was to assert the need for a cash war chest that would sustain businesses for an unknown period of time. We also identified seven key actions that needed urgent attention, as follows:
1: Preserve cash
2: Protect assets
3: Shore up access to funding
4: Collaborate with their management team to share the load
5: Reassure and be honest with employees
6: Communicate with customers and suppliers
7: Commit to mental health.
If COVID has had any pretence of a silver lining, it highlighted the importance of these seven enduring business basics and the need for sound leadership, effective time management, reliable cashflow and proactive marketing.
Sound leadership starts and finishes with a strong vision for the business that includes a clear sense of why business goals are worth working for. Then sharing them with those who will help you achieve them. During COVID, business leaders recognised the importance of maintaining focus by implementing a business continuity plan that would guide immediate decision making for surviving the pandemic, as well as enabling them to quickly regain ground and thrive on the other side.
With clearly articulated purpose, effective business leaders can set and achieve yearly, quarterly, monthly, weekly and daily goals.
During COVID business owners found a renewed interest in understanding their numbers. Sound leadership rests on being well informed at all times, not just during times of adversity, to enable decisions to be made with confidence.
Effective time management is characteristic of sound leaders. Leaders understand their strengths and are patently aware of their shortcomings. They appreciate the value of delegating to others – employees or external advisors – who can do the job better, faster and more cost effectively than themselves. They also seek meaningful insights.
Effective time managers are planners. They begin each day with purpose and priorities, and do not allow distractions to rule them – even pressing ones like COVID. They categorise them as urgent (act now), important (act soon) or for delegation to others, so they may maintain their focus and act accordingly.
Business owners who sacrifice time to micro-manage their business can find themselves exhausted, their team disillusioned and their business not making the progress it should.
Cashflow is a telling sign of leadership. During COVID, leaders who understood their numbers, including the amount of working capital necessary for riding out looming setbacks, were able to enact pre-approved access to finance or loan structures.
Just as importantly, these business leaders benefited from strong relationships. These included their own management teams to whom they delegated and their suppliers and customers with whom they negotiated terms for payment and receipt of monies. While always a priority, but especially during times of emergency, reliable cashflow and a war chest of cash, provides opportunity for businesses to trade out of difficulties, maintain important relationships and bounce back to normal quickly.
Finally, business owners who understood the necessity of proactive marketing including building a trusted brand and consistent communication with their customers before and throughout COVID, have fared much better than those who didn’t.
Reliable cashflow is the direct beneficiary of investing in focused marketing efforts that speaks directly to ideal clients and target markets.
We have clients who have thrived and grown substantially during 2020, thanks to their brand reputation and ongoing long-term approach to marketing.
There’s no doubt, a lot has changed. Cashless transactions, digital rather than face to face contact, working remotely, changed demand for products, stock control, warehousing and logistics for online purchases are now all part of the ‘new normal’.
But perhaps the greatest lessons of 2020 are those of sound leadership, effective time management, reliable cashflow and proactive marketing and adhering to the seven enduring business basics of successful and resilient businesses – COVID or not.
Core Business Accountants specialise in business advice for growing and mature family-owned and small and medium-sized businesses. For assistance please contact us on 5438 8088 or email email@example.com or visit www.corebusiness.com.au