In the aftermath of a series of impactful events that have caused businesses to alter the ways in which they operate, even the strongest amongst them have learnt how important strategic planning is. Even though you cannot always predict what’s on the horizon, it is worthwhile dedicating some time preparing for the unexpected.
Ensuring that there is a strong financial forecasting model in place and offering services that are in line with market demands are just two things that owner managers should pay attention to if they want their businesses to become more resilient.
Having a strong business plan
It’s important to keep in mind that whilst a strong business plan will help you win funding, it can also be used as a valuable planning tool for business owners. Plans will not always convert into reality; there will always be unforeseen circumstances which occur from time to time. Owner managers will be well-advised to employ ‘stress testing’ techniques to ensure that the plan which they have put in place is robust and will be able to face challenging trading conditions.
This can be undertaken from both a positive and a negative perspective; for example, how would the business manage if costs increased significantly, affecting profits and cashflow, and how long could it continue under such conditions? Equally, if the demand increased considerably what would happen? How would the business obtain sufficient working capital to fund the heightened level of trading?
Be realistic about problems that could arise
To plan for success, businesses need to consider different eventualities; being realistic about the kinds of problems that could arise is a big part of building resilience. In a market that is constantly fluctuating, making sure that your business can react quickly and effectively to the changing market demands is crucial. Whilst a lot depends on the nature of the business, having systems in place that provide sharp and structured market analysis will offer business owners the best available opportunity to be able to meet changing customer demands.
Take other players in the market into consideration
A part of a business’ strategy should take into consideration other players in the market and how their positions may change. If the market has low barriers to entry, new competitors could quickly slip in and offer customers something different, or at a lower price. Being able to compete against these newcomers is crucial when working to build resilience in uncertain circumstances.
Reacting to unpredictable situations
Whilst some factors are impossible to forecast, there are always methods available to improve resilience. Having the ability to react quickly to fast-developing and unpredictable situations, whilst maintaining a keen eye on cashflow, will help business owners to stay on the right track in an ever-changing world.
For further information, or to discuss your specific circumstances, please contact Rachel Lai, or contact us via the below contact form.
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