9 questions to get you through the post-Covid world
I split the things I know and need to know about into three categories.
Firstly, the things I just know (in my case accounting, tax and business).
Then, there are things I know that I don’t know. I’m aware of what they are and can ask the right questions to find out about them. In my case it’s how to drum in time (I’m learning how to play the drums – apologies to my neighbors).
Finally, there’s the things I don’t even know to ask about. I don’t know what these things are so don’t know what question to ask.
In this article, I’m running through the top 10 things business owners need to ask themselves and their accountants.
Post-Covid, the game for most business owners has changed. More than ever, it’s important to know what to ask.
At least once a day we’d have a business owner saying the just don’t know where to start with getting their business going again, and that they’re unsure how to think about the world now.
These questions are a good place to start. Ask them of yourself, ask them to your accountant, or contact us to talk them through.
Am I burned out?
Getting through the last few months has been nothing short of hectic. As business owners, we’ve run our businesses, supported our staff, and made the hard decisions. For many, this has come at a personal cost – financial and phycological.
If you’re burnt out from all of this then you’re not alone.
Take a (local) break, find some space and get going again. If you can’t rebound, then it’s going to be hard for your team to bounce back again.
Am I truly using technology?
You’ve got Xero, online payroll and your emails hosted in the cloud. Tick, I’m using technology.
Not so fast.
Technology can integrate the different elements of your business saving processing time, reducing errors, and improving the quality of your data.
A quick example. Take a plumber running their payroll separately from their job-sheets and separate again from their material purchases. The plumber’s sale invoice to their customer might not include all the time on a job if it’s separate to payroll. Materials might be missed from a sales invoice if it’s not tied automatically to the sales invoice when the materials are purchased.
Clever technology, systems and processes can take care of all of this (for any business). Ask yourself the question to increase profits with fewer errors and less time spent inputting data.
(We’re helping businesses with this every day – for an initial run through your setup let us know, we’re happy to help).
Am I measuring the right things?
Sales, margins, cashflow, staff utlilisation and more. If you’re not tracking the right things in your business then you’re leaving cash behind.
As a starting point, there are three numbers every business owner needs to know every day.
- How much cash you have in the bank
- How much people owe you
- How much you owe people
Cash is king more than ever – these three questions will get you across your cashflow both today, and over the coming weeks.
Then it’s about diving deeper. Sales pipelines, inventory turnover, staff productivity and engagement, equipment utlisation and more.
One retail outlet we work with measure their sales conversion times – the time between a customer first setting foot in their showroom to when they buy. They focus on getting this as fast as possible. Increasing the speed of sale directly increases their overall turnover.
What should you be measuring?
Are my assumptions still safe?
Pre-Covid, it might have been reasonable to increase your sales 20%. Is that still true now, or should you be happy simply not to go backwards?
Ask yourself about the assumptions you’ve made in your business, and how they need to change for the new normal.
Think about everything from how quickly customers pay you, to your pricing strategy, to your marketing mix, and where you should locate your business. While plenty of things haven’t changed with Covid, minor changes can have a significant impact on your assumptions.
This isn’t to say you should change everything – simply to check your assumptions to see if/where your business needs to change.
How should I fund my business?
Not all funding is created equal. It’s easy as a business owner to dump your own money into the business. Harder to get money out of the bank.
Just because it’s easy for you to put your money in, should you? If your bank won’t say yes, why should you? Simply to prop-up the business isn’t enough.
Then, ask yourself how much cash your business needs. If you’re under-capitalised you’re not going to make as much as you should from your business. The faster you spin the money in your business the more you make – but, every business needs an ideal amount of cash to get the snowball spinning as fast as it could.
Do you have enough funding in your business to get it spinning as it should? We’re happy to help you work this out – get in touch for more information.
Do my suppliers control my business?
Throughout Covid, we heard stories of businesses not being able to access their usual supplies. From PPE at the height of Covid, to now car batteries being hard to source because of offshore factory closures.
Making sure your business has a plan B if a supplier lets you down is more important than ever. Are there multiple suppliers you can work with? Do you need to increase your inventory holdings? Do you need to go head-to-head with your suppliers and start manufacturing yourselves?
Whatever it is, insulating your business against a supplier letting you down will help you build a more resilient business.
Do my customers control my business?
Not all customers are created equal. And, despite the saying, customers aren’t always right. There are some who suck more time than they should, leaving you less time to serve your best customers.
Look through your customer list and use this as an opportunity to ruthlessly purge. Yes, it feels awkward. Yes, every business needs all the revenue it can get right now. Yes, you’ll feel uncomfortable doing it.
Here’s the truth though. Those customers are taking up space. They’re taking more time than they should. They’re sucking your time as business owner. They’re making your employees enjoy their time at work less.
Most importantly, they’re taking away time you should be spending with your more profitable employees.
What are your criteria for taking on a customer?
How comfortable am I with risk?
Then there’s risk. Being in business obviously comes with risk. Knowing what your tolerance for risk is will help you get through the coming weeks.
If you’re less comfortable with risk, you might downsize. Being smaller will get you through with less stress and you can survive with less revenue.
If you’re more comfortable with risk, then you might be comfortable enough to ask yourself the next question.
Am I thinking big enough?
There’s two elements to this question.
Firstly, understanding what big means to you. It’s not always more turnover, more locations or more staff. It might be in terms of work/life balance for you as business owner. It might be more profitability with fewer customers. It might be more control over business direction.
Then, for whatever big is for you, are you thinking big enough? Off the back of Covid, there’s opportunity everywhere. It’s just (in our view) a limited opportunity which will only be taken up by a small number of businesses in every industry.
Those who miss it will (probably) stagnate and gradually slip backwards. Those who grab it will jump ahead.
So, define your “big”. Get comfortable with the risk. Then jump at the opportunity.
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