Happy New Year – is your planning finished for the year ahead?
The old adage is truer than ever
Failing to Plan is tantamount to Planning to Fail
Happy New Year to you, but what sort of year do we have ahead in 2013
The American congress has signed the bill overnight, which will hopefully prevent the world’s stock markets going into meltdown, but it is effectively only a “sticking plaster” patch – it has not solved the problem of the USA drastic overspending, so we will be faced with continual uncertainty in the next few months.
The French are having to face up to austerity – and we all know how the french like to riot – I feel we have not seen anything in Greece, Spain, Italy and Portugal that will compare to the civil unrest we will shortly start seeing in France.
So how will this affect us and our businesses ?
The problem is all about confidence – confidence of the markets, confidence of the banks, and ultimately confidence of us and our customers.
Business and the markets hate uncertainty – but that is what we are faced with and bucket loads of it.
So we need to do a lot of “What if” planning for our businesses and, in our experience, too many businesses are not good at this type of planning.
They prefer to be “adrenaline junkies” floating along on the current of life, not knowing where the currents will take them and what will happen if the currents change direction.The danger of this is you might just hit some rocks if you go off course, and this could at best damage your business, or at worst prove to be fatal.
So what is the most important issue for which you must plan?
CASH FLOW!
That is the “elephant in the room” and in your planning you have to assume that the banks will prove to be hampered in their ability to help your business if times get tougher.
What happens if your turnover drops by 25% or more?
What happens if your utility bills increase by 10% or more?
What happens if your suppliers costs increase dramatically and there are few other decent suppliers to replace them?
You need to do the figures and work out your different break even levels of trading with all these different scenarios, and you must face up to in advance what costs you will need to cut if your income starts to reduce, or other cost increases affect your cashflow.
Now, to be positive – so far, most of our clients have been relatively unaffected by the recession, but lets face it the austerity measures have not really had a chance to bite yet.
If the Eurozone goes into meltdown, cash funding from banks will be even tighter and interest rates could go up – which will be a nightmare scenario for most businesses.
Where should your focus be targeted in your planning?
Well can I suggest the following priorities
1. What if planning as suggested above, producing your different break even levels of trading;
2. Check if there are any costs you can cut or postpone to preserve as much cash for the year ahead as possible;
3. Plan what you could do to increase your customer numbers;
4. Plan what you would have to do to be able to get your customers to agree to pay higher prices for your goods or services;
5. Identify what other businesses you could work more closely with to cross refer each other some new business opportunities;
6. Identify which of your customers you could approach to ask them carefully to refer you to new potential customers – after all word of mouth advertising is the cheapest form of marketing;
………………. and most importantly
7. Have someone who knows what they are doing to review your strategy for making better use of the Internet – this must not be ignored – too few businesses are making proper use of the Internet and simply because they do not understand how.
Remember we are here to offer help and support to you – running a business is a tough and lonely job.Asking for assistance as a leader shows awareness and leadership credentials that so many lack – call us today (00-44-1323-724400) if we can help you in any way with your planning.
Happy New Year and good luck.
Mike