An election like no other in history, a volatile economy, a global pandemic – sometimes it is hard to comprehend all that we have experienced this year. Change is inevitable in any environment, but 2020 has mandated that we remain poised for change, requiring many businesses to pivot over and over.
I am amazed at the entrepreneurial spirit I see in our world today. Innovative business owners are continually adjusting and reinventing their companies to remain relevant to their customers and prospects. Our Exit Planning Peer Advisory Board, which has grown this year, has also remained relevant – and valuable – as business owners have come together to support each other by sharing experiences, solutions, resources, and ideas.
Even as some situations start to resolve, the need to be ready for potentially rapid change is not going away overnight. What can you do to be prepared? Here are three areas you can focus on:
- Know where you stand financially.
Ensure that your financial record keeping stays up to date and that you know how to interpret your primary financial documents. They keep you informed about where you are and serve as guides to where you want to go.
- Balance Sheet
- A snapshot in time of your financial status
- Shows where cash has been converted to inventory, accounts receivable, and assets
- Provides data to assess debt and liquidity
- A tool for calculating net worth
- Income Statement
- A moving picture of how your business performed during a specific time period
- Illustrates revenue versus expenses during a specified time period
- Provides data to calculate gross profit, operating income, and net income
- Use to analyze the bottom line
- Statement of Cash Flow
- Shows where cash comes from and where it is spent
- Positive cash flow = good financial health, funds to reinvest in the business
- Important tool for managing finances and making informed business decisions
- Optimize your opportunities, effectiveness, and efficiency.
Know what your competitors are doing and take a hard look at what you might do differently to differentiate yourself from the competition. Reassess your customers’ needs, business practices, costs and suppliers. Consider these points:
- Can you add products or services, or tweak the ones you have, to expand your market?
- What has changed about your clients’ needs? How can you better meet those needs and better serve customers?
- How can you make it easier for your customers to connect with you?
- Can you offer any special pricing or payment plans?
- Does the opportunity exist for you to tap into a new or expanded client base?
- Do you need to change marketing strategy or activities?
- Is your supply chain structure working well in the current business environment?
- Can you negotiate special pricing, payment plans, shipping/delivery options, or incentives from suppliers?
- Reassess operations. Can you improve efficiency or reduce costs?
- Fortify your foundation.
Reconnect with why you are in business and what your business is built on. This can provide you with clarity, direction, a renewed sense of purpose, and serve to spark creativity. Strengthen your relationships and consider how you connect.
- Look to your core mission and vision for direction.
- Do you need to revise your business strategy? Are your business structure and business plan aligned with your current strategy?
- Review and update communications plans and tools, not only internally but how you reach out to customers.
- Do you need to upgrade technology?
- If staff members are working remotely, review the process and fine tune for greater efficiency.
- Nurture a culture that will serve your business, your staff, and your customers. Review my blog, Cultivating Company Culture in the COVID Era for suggestions.
- Consult your trusted advisors.
- Consider joining our Exit Planning Peer Advisory Board (PAB).
The PAB provides a safe place for business owners to discuss their challenges and offer support and insights to their fellow members. The events of this year have put businesses and their leaders to the test – more than any event in recent history, and PAB members have found that their peers have dug deep to find and offer business solutions as well as personal and moral support. Board members have together found creative solutions for pivoting to adjust to changes in the business climate while retaining business value.
Like all business owners, you’ve likely dealt with changes that have required digging deep into the details of your business and how you operate it. You may have also discovered that it’s a good time to re-evaluate your long-term goals and exit strategy. The earlier you start to plan, the greater your chances of success at exiting on your terms, and the greater the opportunity to prepare for unexpected changes that can most certainly happen.
We invite you to be a guest at our next Peer Advisory Board meeting on January 20, 2021, and see for yourself the value of ready access to the wisdom and support of your peers. We will be discussing Post 2020 Budgeting. Contact me for details or for a complimentary consultation regarding your exit plan or current business challenges.