Is there life after the crisis or 5 recommendations for those who are looking a few steps forward
Lyubov Tsymbal, the founder of the company "Finance Solutions Group"
It the time to look at the situation from a different angle.
Many companies cut costs and freeze projects, cut staff, try to repay loans or agree on restructuring, someone is selling assets or part of them. Everyone saves their business in an emergency mode than they can, as they can. But I want to remind you that now is the time to think about what will happen after the lifting of quarantine bans and a more or less understandable situation with the timing of economic recovery. Thinking not about what we did yesterday, but about what we will do the day after tomorrow.
One thing is clear - it won’t be like before. The world will change, we will change, our business will change. The crisis will destroy the old order and create new rules of the game. So, forget about how you worked before. Only flexible entrepreneurs survive in a crisis.
And for this we need to prepare right now. It is important for business not to live one day. The introduction of a risk management system in a rapidly changing world today is no longer just incomprehensible words, and the situation that has arised explained it very clearly to us. The expressions immediately became clear: “financial stability”, “financial stability”, “reserve fund”, “budgeting”, “financial modeling” and others. If it’s easier, it’s important to look a few steps ahead and calculate plan B, plan C, and so on.
My recommendations for those who see the future in the post-crisis world.
First, stop. Remember that this is not the first and not the last crisis in our lives. Do not panic. Turn on a cold mind. Think about the crisis ending, and you will continue to work. Count in detail each of your actions now, which will entail changes in the future. Answer the question: how stable is your business and what can affect it in a month, three, six months?
Second, conduct an audit of your company's business processes, and you will solve at least three of the most important issues:
• How much profit is lost due to the lack of a clear system?
• How to get out of operational chaos?
• How to optimize the economics of projects and reduce to zero the loss of money within the company?
Today you have more than enough time for this, which has always been so lacking for strategy and management tools.
As a result of the audit, it will become clear: 1) where up to 50% of net profit is lost and how to fix it; 2) what impact on the final result each member of your team has with whom it is better to say goodbye as the ballast that pulls your business back, and who needs to be given additional powers to make the work as efficient as possible; 3) what should be your action plan for the optimization and automation of processes in the near future.
Third, carry out the optimization of business processes, this is work for the future, your investment in post-crisis recovery. Imagine for a moment: the minimum cost reduction after the optimization is 10%, the maximum - up to 50%. Thanks to optimization, it will become clear that it is necessary to cut off everything that is unnecessary and transfer the time-consuming and money-intensive functions to outsourcing. This will increase the mobility and adaptability of the company at this stage and free up an average of 25% of the time previously spent on routine operational activities. And this, in turn, will allow you to tackle more important strategic tasks.
Fourth, take care of building an economic security system in advance (if you do not already have one). It should be formed taking into account the financial interests of the company: the growth of the market value of the company, maximizing profits, the availability of a sufficient amount of fixed, additional capital and investment resources, tax burden planning and so on. Be sure to use modern information systems and databases, because accounting in “barn books and with bills” is the day before yesterday.
No matter how ridiculous it sounded, the “state in a smartphone” for so many businesses in Ukraine is still something cosmic. Every time I start working with a new business and a new project, I am amazed how, with the existing technical and legislative capabilities, staff accountants can continue to have such a strong love for papers, important ten signatures on each document, calculators, and sometimes invoices. Who today puts their signatures on documents in your companies, just wondering?
It is also important to timely and thoroughly assess the internal and external risks of the company, check the business reputation and solvency of customers and contractors.
Fifth - work with the team. No need to hide from employees. If they need to reduce costs for the survival of the business, they will understand, even if this understanding does not help them, with what opinion about your company will they leave? Do not forget - the crisis will not last forever, and the business will recover, what will happen to your reputation as an employer? Your subordinates should be aware of the difficulties and plans for overcoming crisis situations. Everyone wants to understand what happened and what changes await the company and him personally. At this stage, trust is more important than ever.
And, of course, keep feedback with consumers of your products / services. After all, who, if not they affect your business. It is important to be interested in whether they are satisfied with the quality of service / products, what they would like to change, etc. Having collected information about shortcomings directly from the client, you will have the opportunity to refine, correct errors, choose the most optimal solution to the problem.
Everything in business is constantly changing. There is no magical eternal formula for success - it is also constantly changing. Therefore, the more we experiment, the more opportunities our business has to react on time and stay afloat.