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With lots of us having more time on our hands than usual, it’s the perfect opportunity to take a good look at business lessons learnt in lockdown and work out how you can come out of it stronger than ever, as Lee Meredith explains.

 

Without wanting to trot out a series of inspirational quotes along the lines of ‘There is no education like adversity’ from British Prime Minister Benjamin Disraeli, or ‘Storms make trees take deeper roots’ by that famous philosopher, Dolly Parton, there is truth to the fact that struggles can give you strength and good can come out of bad.

We are currently in a seemingly never ending period of worry, in terms of both our health and wellbeing, as well as our livelihoods, and the impact Coronavirus is having on our economy.

However, it is, I believe, possible to use lessons learnt in lockdown to improve things going forward and help your business come out of it in even better shape.

 

Identify unnecessary costs

As businesses begin to ramp up over next few months, instead of going back to the status quo, think of ways to become more streamlined and efficient. What have we learned which we can improve on going forward?

Most businesses are operating at their most lean right now, and have cut back on everything but the essential costs. Building the foundations to become even stronger in the future is about identifying those costs and challenging the necessity of them, not just slapping them back on when you’re back to operating at higher capacity.

One way of doing that is to use cashflow projections. A lot of businesses are encouraged to produce these projections and for good reason. But, instead of using them simply to see what money is expected to come in and out over the following months, use this data as a tool to not just ‘see’ where the business is going to go, but to dictate its trajectory going forward.

A lot of owner managers simply haven’t had the time to analyse this data and use it, but during lockdown, while operations are, for many, still on hold to a greater or lesser extent, you have the downtime to do just that. It’s about using that time productively, being positive and believing that disaster can help make business better and stronger for the future.

I believe that identifying these key cost savings alone could mean benefits to the bottom line within a few weeks once things start to return to normal.

 

A virtual future?

Different businesses in different industries will have different costs, but there are some common denominators that have been generated by the virus itself.

The obvious one is the use of video conferencing. In the service industry, huge costs can be, and are increasingly being, saved by running virtual meetings. Consider whether this can be applied to your business more, once lockdown ends.

If it can, not only will there be significant savings from a financial perspective, i.e. cutting down on the number of pool cars in the business, as well as fuel and other travel costs, but also in time – arguably a more precious commodity in some instances. Not spending time on the road traveling from meeting to meeting will mean more time on deck in the business.

 

Time for staff appraisals

More savings can be made around the issue of staff potential. With businesses taking the opportunity presented by the UK Government and furloughing staff members, you may well have found that certain employees remaining in the business have had to take on more responsibility and cover multiple roles.

You can identify who has stepped up to the plate and use that going forward. It will not only develop the employee for the good of the business, but also allow you as the business owner to step away from certain tasks. This will allow your focus to shift onto other areas of the business that may be neglected due to time constraints. The end goal is to use your time as productively as you can. This will ultimately strengthen the business going forward.

There are also opportunities presented by looking at what a company is actually capable of. It may be more than you thought. We’ve seen the stories in the news about manufacturers who, within days of the crisis, expanded their operation quickly to produce face masks and ventilators.

With our rich and gloried history of manufacturing in the West Midlands, businesses should look to see if they can expand a product range and make a success of it. Not only is it more earnings potential, but you may be diversifying your business and lowering the spread of risk. You may surprise yourself!

 

Eggs in baskets

Key lessons can also be learned around truly understanding your customers and suppliers. Use this time to analyse whether you are too reliant on one customer or one supplier because, sadly, some companies may not survive this crisis.

The majority who do, though, need to identify key suppliers and have a contingency plan. If they’re going to be bigger and stronger, they need to have the supply chain up there with them.

Owner managers can also spend some time reviewing sales history to see what products are selling best and which have the highest profit margin and perhaps setting that margin as a benchmark for future work.

 

By analysing data you already have, I believe companies can – a bit like a lot of us at home – use lockdown to get fit and emerge stronger and healthier than before by using their business lessons learnt in lockdown.

Are you unclear on any COVID-19 related issues that your business is facing? Get in touch and we will be happy to assist you

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About the author

Lee Meredith

Lee has spent over 12 years in the profession, qualifying with a regional West Midlands practice before gaining further Audit experience with a Big 4. He is a qualified Chartered Accountant and holds professional membership with the Institute of Chartered Accountants England and Wales (ICAEW).

His portfolio of clients spans a wide range of sectors. Lee enjoys building a good working relationship with clients providing a high quality service.

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