Navigating Your Business Through Uncertain Times
Was your business affected by the global coronavirus pandemic?
The coronavirus pandemic has caused much disruption in business, pushing organizations to drastic action to survive and thrive. Firms in face-to-face service industries and the transport industry have especially been affected due to stay home and social distancing measures put in place by governments around the world. Micro, Small, and Medium Enterprises (MSMEs) have also been hard hit as they typically have limited access to funding and technology making them less able to adapt to market disruptions.
Firms are facing challenges such as reduced revenues, increased costs, value chain disruptions, withdrawn funding, and trade contraction. Due to the pandemic the world is facing global economic volatilities, linear supply chain limitations and fears of an impending recession.
Though pandemics are not a common occurrence, businesses and especially start-ups, are still prone to a myriad of uncertainties and we are here to help you navigate through these challenges.
How should I navigate my business through uncertain times?
Business uncertainty can be a result of political, technological, economic, and environmental events. This inherently makes it difficult for businesses to predict their financial performance due to the constant, unprecedented change. To survive such times, business owners and managers should focus on the following:
- Embracing Technology and Partnerships
Businesses that have survived and thrived during the coronavirus pandemic are those that turned to using technology platforms to engage with their suppliers and customers. This means that they are ensuring their products and services can be accessed online as well as partnering with businesses in the transport industry to have products delivered to the consumer (sometimes at no cost to the consumer).
Embracing financial technology has also been an important component of success as retailers and distributors have turned to contactless money transfers and payment methods, while waiving fees for online and telephone transactions.
- Staying Lean and Agile
An agile business is one that is creative, adaptive, and resilient during challenging times. To achieve this, the business needs to have an efficient way of operating. Lean operating minimizes waste while maintaining product quality; and this can be achieved by automating systems and standardizing processes
Adopting these two approaches can help streamline operations and cut unnecessary costs thereby helping the business to save money. Simplification is key as it allows you to conserve cash.
- Transparent Communication with Customers, Staff and Stakeholders
Uncertainty increases the cost of doing business, making it important to be transparent with your customers about product pricing. This strengthens customer relations and builds brand loyalty. In addition, business owners or managers should be clear on whether it makes financial sense to take on a new project or product – even though it looks like a great idea on paper.
Keep your staff in the loop on the state of the company and any action plans to be implemented so that you can brainstorm and find a clear way forward.
Communicate to your investors and stakeholders on strategies, plans and forecasts and be willing to address their questions to increase their confidence in your business and its ability to weather the storm.
- Tracking Business Performance and Maintain an Adaptive Business Strategy
It is important to have a strong financial system in place that incorporates current and projected financials, tracks income and expenses, and enables you as business owner or manager to have perspective on how the business is performing. This enables you revisit and revise your current operating plan so as to adapt to changing times. This also helps the business be in control of its finances by keeping track of key numbers and maintaining steady cashflows.
- Having a Risk Management Plan
The Scouts’ Motto says, “Be Prepared”. Therefore, it is wise to have a risk management plan even when markets are stable so that in the event that things go wrong your business is able to mitigate the consequences.
To create the plan, first map out all your potential risks and then rank them according to likelihood and impact. Next, determine how you want to deal with the risks by applying any of the below approaches:
- Avoid the risk completely,
- Reduce the risk by dealing with the impact and likelihood of occurrence,
- Accept the risk as a regular part of the business and plan for it accordingly,
- Transfer the risk partly or wholly to an insurance company.
In conclusion, uncertainty is a challenge that all businesses have to deal with at some point in time. The key is to have mitigation strategies in place so that such challenges can be turned into opportunities for innovation and growth.