What do when your existing business needs a new business plan
When we look at the economic impact of the pandemic we see a tale of two halves. Some businesses have closed for good, many are working overtime to adapt and stay relevant to their customers.
Businesses are having to implement sharp pivots, retooling services, altering revenue models almost overnight. And all this when the revenue picture is clear as mud.
The stakes are high, but so is the opportunity.
Organizations that innovate and adapt to changing consumer expectations will survive. Here are a few things you need to know before you sit down to draw up a new business plan for your existing business.
Understand the opportunity
Big shifts in consumer behavior since the lock down are dramatically reshaping food, retail, consumer goods and other service industries. It is critical to understand the factors driving that change and mapping out how you can meet emerging customer needs.
First, identify areas in your existing business that must change. Second, look at small changes like adding a new channel for customer service, which can generate quick wins. Lastly, evaluate if your business needs diversification or a new revenue model to continue growing.
Know your cash flow
Cash is king. We’ve all heard it before, but few of us truly understand it. Till now. With revenue growth uncertain, staying on top of receivables and payables is absolutely critical.
Investing in customer service or adding a sales channel is great, but it can bump up increase costs. Maintain a sharp focus on liquidity as this will help you pay bills, salaries on time and give you the ability to leverage new market opportunities.
Refinance debt, look for alternate funding
This is a great time to evaluate your capital requirements over a longer period of time. With recent interest rate cuts lowering the cost of borrowing to historic lows, it’s also a good time to refinance your debt and save on interest costs.
We recommend you sit down with your bank to explore ways to enhance your capital and lower interest costs. Consider setting up a revolving credit facility, raising overdraft limits. Depending on your situation, you could also consider alternative sources like crowdfunding or mezzanine debt (which isn’t for everyone).
We’re all digital now
The pandemic has crushed the notion that a business is too small to go digital. Success in businesses today depends on how well you can continue serving your clients even when it isn’t business as usual.
If you haven’t already done that, look for ways to go all digital and move your business networks to a cloud. Digital transformation makes your business agile, reduces cost and creates opportunities for further optimizing your business down the road.
Now that you have your ducks in a row, you’re ready for a new plan. Here’s a handy guide from SBA to help you get started.