The Office for National Statistics (ONS) has revealed its latest experimental data on the economy. It shows that nearly half (48%) of currently trading businesses have reported that turnover has decreased below what’s normally expected for this time of year.
While this is unlikely to come as a surprise given the impact that Coronavirus has had, it’s still something that’s concerning business owners.
If you’re running a company and turnover is down, what can you do to ensure resilience? Aside from taking advantage of the government support schemes, business planning is critical to survival.
Admittedly this isn’t always easy. Planning for the unknown is always difficult, let alone in a world that’s trying to navigate a global pandemic. Here at PKB, we’ve helped many businesses get through difficult times so here are just a few of the steps we recommend implementing to help minimise potential disruption to your organisation.
- Review your budget and set realistic and achievable targets for the remainder of 2020 and early part of 2021.
- Involve your employees in a discussion of likely trading conditions and ask for their input on reducing costs and maintaining revenue.
- Use ‘bottom up’ budgeting where everyone in the business gives input in the areas they have control – target a 10% cost saving.
- Review and flow chart the main processes in your business (for example, sales processing, order fulfilment or shipping) and challenge the need for each step.
- Encourage team members to suggest ways to streamline and simplify processes. You could for example sit down and brainstorm about efficiencies and cost reduction.
- Put extra effort into making sure your relationships with your customers are solid.
- Review your list of products and services and eliminate those which are unprofitable or are not core products/services.
- Review efficiency of business processes and consider alternatives such as outsourcing certain activities locally or overseas.
- Agree extended payment terms with suppliers in advance.
- Pull everyone together and explain the business strategy and get their buy-in.
Please remember that if your business is struggling, you’re not alone. This has been a tough year for all businesses, and many are struggling to stay afloat. By addressing the issue head-on however, you’re more likely to survive.
Please get in touch with PKB and ask about cashflow planning for the next six months. We can help you with a template so you can do this yourself or we can work together to produce estimates for a variety of scenarios. We can also help you apply for the government’s Coronavirus schemes which can inject some much-needed cashflow into your business.
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