Be on top of today’s challenges with tomorrow’s solutions
It is no secret that the pandemic has taken a toll on many people, but the trend that we have seen this past year is that businesses are struggling now more than ever. There is no doubt that the COVID-19 pandemic has added to business challenges worldwide, regardless of size, location, or funding.
As your business grows, you will encounter new problems, need new solutions, and become aware of new opportunities. Your goal is to ensure that your decisions today help your business soon.
Recognizing today’s business challenges will help you plan and stay prepared. You know what decisions are required will lead to more efficient decision-making. Planning will boost your ability to overcome business hurdles faster, thus driving sustainable growth for your company.
Without further ado, let us look at some of the challenges that businesses are facing today.
Defining your business strategy.
- Develop a true vision. Your vision should include aspirations of what type of company you want to be, where you are, and articulates what success looks like in clear specific terms. Break away from looking for the correct answer, and instead, you try to find your answer.
- What does my business stand for?
- What are your values?
- What impact do I hope to make?
- What segment of the population do I wish to serve?
- How do I want my business to be regarded?
- What are your growth metrics for 1-3 months, 2-6 months, and 9+ months?
Advance your strategy.
- Clear, long-term objectives. Your business strategy must be realistic but should also be visionary. When defining your goals, ask yourself questions like “What market(s) do we want to serve?” and “What services/products will we offer to get to desired growth?”
- Opportunity. Think about what options might exist in the future and how your business might evolve to take advantage of them. Positioning- This is key to your business actively pursuing these possibilities. None of us can predict the future, but that does not mean we cannot plan what we would like.
- Innovation. You must ensure that the products/services you are planning to offer are unique, with a clear differentiation, and that they are, of course, aligned with your values. One of the most important decisions you will make is which segment of clients you want to serve. Once you have identified your niche, you can focus your entire business in a laser-like way on meeting their needs.
- Risks and failures. Factor risks into your strategic vision and allows your business to accept failures because they are inevitable. Let insights be gleaned from both successes and failures, and inform your strategy, which will evolve. Your business strategy should be amenable—not resistant—to change.
Ensure your strategy is true to your vision. Your plan should adjust to your vision, not the other way around. Your vision is the anchor that holds your business together.
- Evaluate your vision. Your vision should be:
- Concise and give purpose to your business.
- Inspiring but also realistic, with the power to motivate. Strive for big picture aspirations with simple objectives. Allow yourself to dream, but do not stray too far into fantasy.
- Your foundation for everything you do in your business from now on.
- Linked to your strategic goals.
Managing your cash flow.
- Monitor your cash flow regularly. Online accounting software makes it simple to balance accounts, generate reports, and drill down on account details. Because your information is secure in the cloud, you can easily stay on top of your cash flow wherever you are.
- Cut costs. Focus on recurring monthly, quarterly, or annual expenses.
- Can you cut back on utilities, rent, or payroll?
- Are you spending money on subscriptions or services you are not using?
- Do you have insurance you no longer need?
- Can you renegotiate the terms of outstanding loans or leases?
- Get a business line of credit before you need one. A business line of credit is a good insurance policy against cash flow problems. You may be able to get a line of credit for a percentage of your accounts receivable or inventory if you use them as collateral.
- Lease equipment instead of buying it. By leasing vehicles, computers, and other business equipment, you get access to the latest features and avoid tying up cash—but you still get to expense the lease costs on your business taxes.
- Stay on top of invoicing. Send invoices when your services are completed, or products are delivered.
- Find out the specific person, job title, and address to send your invoices to so they do not get lost in a shuffle from department to department.
- Design your invoices so they are easy to read, with critical areas like due date, the amount owed, where to send payment, and payment methods highlighted.
- Speed things up further by emailing invoices instead of mailing them.
- Get paid faster by using mobile payment solutions. If you sell products or provide services at customers’ homes or offices, get paid on the spot with mobile apps that use your smartphone or tablet to accept payment by credit and debit card.
- Speed payments by offering deals. Consider offering your customers/clients incentives for early payments, such as a percentage of the total. Do the math beforehand to ensure the tradeoff (getting paid early) is worth the loss (less money in the long run).
- Ask for deposits or partial payments on large orders or long-term contracts. Is it appropriate to ask for a 10 percent deposit upfront? May you receive half the total SOW or contract amount when work begins? Then the balance on completion. Charging this way, you generate cash that finances the materials or adds to your bank balance before having associated expenses.
- Delay payments to your vendors. Unless there is a worthwhile incentive for you to pay early, figure out how late you can pay your vendors without risking late fees or harming your relationship. These actions keep the cash in your account and out of your vendors until it must be there.
- Funding your growth. When preparing for expansion, consider that growth consumes resources at a frightening pace. Pre-funding your growth can reduce financial stress and give you time to reap the rewards of growth.
- Cash generation. You can boost cash by capturing all the opportunities you have for sales.
- Increase prices. Although raising prices is easy, how you increase them matters. For price increases under 10 percent, the client will not notice. A communication and enrollment strategy for price increases of more than 10 percent helps adoption because you get the client’s emotional buy-in to accept the boost.
- Utilize Upsells. Upsells are the “Would you like to super-size that?” strategy. The idea is that by “upselling” a better or larger service, the client gets increased value, but your costs for providing the upgrade do not exponentially increase. Each upsell can increase the lifetime value of your loyal customers, paying off for many years down the line.
- Upsell after a customer/client reaches a success milestone:
- Being a customer for a year
- Spending a certain number of hours using your app
- Accomplishing a certain number of tasks in your product
- Logging in a certain number of times
- Installing integrations or add-ons
The problems faced by businesses are considerable. Being prepared to consider the challenges ahead will put you ahead of your competitors. We have looked at some ways to meet your challenges, but there is no avoiding them.
On the other hand, your passion will keep you motivated and inspire others to take advantage of every opportunity to gain experience.
Utilize the suggested solutions and tweak them to match your needs. There is no universal fix for business growth in these strange times, but now you have several ways forward toward a brighter, more resilient future.
How you respond to your challenges will put you on the path to winning and growing. It is important to remember that your challenges are just that – challenges and people do overcome them.
For most challenges, there is a workable solution. Do not give up.
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Plan! Adapt! Manage! Succeed!