Time on your hands?
Four weeks into lockdown and many business owners will be feeling the strain. Whether that is from having too much work or none at all. We work with many different businesses and have some who can't trade at all and others who have kept an income coming in by finding new ways of working. Its inspiring that many can keep going but I know many business owners are frustrated by the forced inaction. We know that business as we knew it will change and this is a great opportunity for those who have time on their hands to consider their business and how they can do things differently in the future.
When you are busy working there is never time to review and plan for the future. We know we should make time but whilst there is fee earning work to do that remains the priority. So business owners who can no longer trade should try to use their time now to get inspiration and plan for the future.
Here are 6 suggestions relating to finance and business for you to consider if you have time on your hands:
Review your costs
Identify the excessive costs in your business. Do you need everything you pay out for? Could you source a more cost effective option?
Now you have the time to obtain and compare costs for telephone, gas, electricity and insurance. Maybe you can't change provider right now but if you have done the legwork you will know who to approach when the time comes to change your contract. Of course the prices may have altered by then but if you have a list of contacts and some comparisons you will very quickly know who you want to get in touch with to get current prices when you are ready. Telephone and mobile charges are also likely to be costs that can be reduced.
If you pay delivery charges for goods you buy check that they don't exceed the cost of the items you are buying. If they do you may be able to save on delivery charges by ordering more less frequently - plan ahead.
Small businesses also need to make sure that they are receiving the small business rate relief if their premises valuation makes them eligible. And if rates are included with your rent if you register for your own rates you may be eligible for the relief and your rent will reduce too.
Review your income
Take a look at your income streams and the costs of generating those income streams. Which are more profitable for you?
Of course it is not necessarily the least profitable that you should get rid of because they may be your loss leader - the purchase that brings in your customers and which tempts them to buy something else which is more profitable. We always record income streams and the direct costs associated with them separately in the accounts so that business owners can easily see that (hopefully) the income is much greater than the cost. Unless you sell only one thing you should not record everything as "Sales".
Look at whether the delivery charges to your customer cover the actual costs of delivering the goods. A round sum amount for delivery may not actually cover the postage or courier cost. Postage charges have just increased so it is worth checking, if you use this method for delivery, that you have increased your prices too.
What has worked well
This is an opportunity to look at what has worked well for your business in the past from marketing to suppliers and to make sure that it is still working well for you. Good, reliable suppliers are key to your business whether for goods or services. Use your best suppliers as a bench mark against other suppliers to ensure that not only are you receiving the service or goods you expect but also receiving great customer service. Unhelpful suppliers, poor service and late delivery do not help your business. Now is the time to consider each of your suppliers and if you are not entirely happy with them research some new ones, gather some prices and a feel for the service they can provide you.
Now is the time to find your way around the marketing medium which works for you whether that is Facebook or Linkedin or some other social media option which suits your business, Use your time to set them up to work better for you or if you aren't keen to do it yourself identify a selection of social media experts to find which one would work well for your business. Whatever marketing you are doing you should consider how much it costs and how much you gain from it. Sometimes you can't identify where your customers come from but you just know that if you didn't have a presence in certain media you wouldn't get so many customers so the cost may be warranted. There are also lots of free places you can advertise your business so it is worth checking those out.
Review your service
Just as you want to work with good suppliers, your customers want to work with a good supplier. Consider all the aspects of your best suppliers and see if there are any aspects of what they do that really makes them stand out for you that you can incorporate into your business or your service.
What hasn't worked so well
Having time to reflect on your business and how it has been over the last few months, year or several years, may help you to see what hasn't been working. Maybe its the staff you have - too many, too few or the wrong combination. Maybe the premises you have isn't right - too big, too small, in the wrong location. Maybe what you have been selling all these years needs to change to reflect how times have changed. Maybe some of your customers are just not worth having (if you have a choice). Its easy to keep doing what we have always done in the way we have always done it because there is no time to think through how to do it differently. Now there is time. Think about your staff and how morale can be improved or consider a team event when work gets back to normal. Think about what you could do to improve your premises - a change of layout, decoration, etc. Think about the customers you have - how great the majority are and whether you need the minority that aren't.
Read or listen to some books
There are a myriad of business books available which will give you inspiration and motivation. There are books about finance which will help you to understand finance terminology and the key figures you should be monitoring in your business. There will be books about your industry which you can gain tips from. There will be books about managing staff, managing cash flow, putting systems in place and reducing your working week to 3 hours (not possible or wanted if you enjoy what you do!).
If you are one of the many businesses who have not been able to trade over the last few weeks use this time to get your business into good shape ready for your return. And if you need help getting your accounts or your payroll under control or you need some training to do your accounts on Xero we are here to help.