As the saying goes, you don’t know what you don’t know. But in business, not knowing can cost you dearly. James Henderson, from accounting firm HLB Mann Judd, looks at the best ways to protect your business.
Future proofing is the process of anticipating future events and their likely business impact, and developing methods of minimising their effects. It is not about quick fixes – it is a long-term and continuous course of action.
Ways to future proof a business include:
Ensure that a business is profitable and has strong, free cash flow. Then if trading slows for a time, it can better withstand any lean period.
Profit alone is not enough. Know the difference between profit and free cash flow. A business may be growing so fast that all of its free cash flow is being put back into it. Unless it has an unlimited source of money, this is how many businesses go broke.
Quick fixes won’t cut it. Understanding where the business is now helps owners to plan where to next. This may include a SWOT analysis, which looks at the strengths, weaknesses, opportunities and threats of a business, and builds strategies on how strengths can be used to capitalise on opportunities.
One of the biggest failings is the lack of an action plan – with timelines, allocated responsibilities and importantly, accountability.
Everyone would have experienced planning sessions where everyone walks out pumped up and raring to go. Unless there is a plan for direction and accountability, momentum – and action – quickly stalls.
Implement the plan
Even with an action plan, business owners can get bogged down in dealing with day-to-day operations. To ensure this doesn’t happen meet with the management team regularly to ensure that actions are being implemented. An external facilitator can be helpful when difficult decisions need to be made.
Quality and service
Good quality products and customer service are the best foundations for a business. If the customer experience doesn’t meet expectations, trust is quickly eroded. Consistent quality in the client experience not only builds trust in your brand, it is also essential to bringing in repeat business.
Top quality people are essential for this.
Some technological advances will be no more than a passing fad while others will help improve a business’s long-term approach. Whether it is cloud computing, social media, apps or innovations in inventory management, keeping an open mind about how technology can improve everything, from administration and promotion to productivity and staffing, is important in staying relevavnt.
A strong team is the driving force of any business. It is important to provide a supportive, team-based workplace. A person who feels appreciated will always do more than what is expected. The best thing you can do for your business is arm your team with more skills.
As industry and the marketplace evolves so should businesses; they should find at least one innovation that separates them from their competition. Most importantly, innovation doesn’t stop. There never should be a moment where businesses say ‘that’s enough innovation for today’.