Depending on the industry of your business you may or may not be able to resume work from where you had to stop at an instant, about three weeks ago.
- Take some time to think about how much it would take to restart and/or complete those jobs. Write it down!
- Make a list of these jobs and individual tasks while everything is still fresh in your head.
- Once the doors to your market open up again, be mindful – the first few days will be overwhelmingly busy. That’s when you can use your list as a “Priority-Tick-List”, keeping you calm and focused. Your customers, suppliers and staff will be very grateful for your professional approach.
Unless they are considered providing essential products and services, small and medium size businesses are hard hit by the consequences of the Covid-19 pandemic. While all active operation is on hold, administration seems to continue nevertheless. Invoices and statements come in, Automatic Payments and Direct Debits go out without anyone paying attention, until the fund in the Bank account drops significantly. There are some simple ways to keep on top, for example:
- Scan or take a photo with your mobile phone of snail mail. Along with documents that you receive via email, store them all in a Dropbox or Cloud folder so they won’t be overlooked.
- Communicate with your bank!
Forced operational downtime is a great opportunity to look at past results, and work on future improvements! Right now none of us is ignoring any high priorities by doing this, especially if we consider that on a “normal” day we would not even be at home.
You may not be the perfect number-cruncher, but looking at your last Profit/Loss Statement as if it were a puzzle, you may find that the numbers have painted a picture – a picture of your business. Do you remember/recognise what certain expenses were for, and do they make sense?
Making a note of any items that stand out as unusual or extreme helps us investigate further. Maybe it was something out of the ordinary at that time – maybe we discover something else. These unusual expenses are often a sign of a change in our operational behaviour.
Do you know exactly how much money is owed to you? And do you know by when you should expect it? Do you also know exactly how much you owe others …and by when they expect payment? If you put those numbers together, you see a bigger picture – your Cash Position and future assessing Cash flow forecast may help you find a way of negotiating your way through this challenging financial minefield. A clear understanding of what’s really going on is a real bonus when considering taking up additional finance.
Now that every part of our operation is sitting idle, we can take the opportunity to reflect on how much money our business is spending outside the direct costs for the product/service that we sell. The costs of labour, raw product, deliveries and the likes will always be part of our bare business, which I’m sure everyone always endeavours to get for the best price. There are however the overheads, for example rent and insurance which cannot do much about; and then there are the other operational costs, such as administrative costs, and vehicle costs. Wouldn’t it be nice to have control over these expenditures – at least to a degree?
With the observation of some key performance indicators, overspending or under-performance can quickly be discovered – helping us to make adjustments. For example – and I know I’m touching a tender spot for some – is everyone in the business driving a practical and financially appropriate vehicle and, why are people using their dedicated vehicle instead of pooling?
This forced break has provided me some time to prepare for the future. I’m wondering how many small changes in purchasing any business related goods have sneaked in over some time with a considerable increase in product cost. They have quite an impact on the bottom line, and have in most cases creeped up simply by a lack of time to do some due diligence!
Now is probably the perfect time to check it out; look at the details and prepare re-arrangements. A Budget is a great way to avoid or at least minimize this from happening in future.