Economists are warning of a slowing economy. While of concern, trends depicted by macro data do not necessarily translate into reduced returns for all businesses. The trends are a reminder, however, of the importance of paying attention to business fundamentals and adjusting your business model accordingly.
Customers – how has demand for your products or services altered? Is your stable of repeat clients growing? How can you encourage increased spend?
Consumer trends – what market openings have resulted from changes in the business environment?
Unique selling proposition (USP) – what makes your products or services stand out? Is this clear in your marketing? Have competitors encroached on this?
Suppliers – are they delivering what you need in a timely manner? Are their prices and payment terms still favourable when compared to other suppliers?
Cash flow – minimise stock levels without losing sales and quit slow moving stock. Contact customers promptly when payments are overdue. Prepare a forecast and plan to address projected shortfalls before they happen.
Financial results – keep your accounting records up to date and understand what your financial reports are saying. Regularly compare actual results to budget and proactively adjust your business plan to reflect trends.
Plan for the worst – what options do you have if your sales are below forecast by 10% or 20%? Or supplier prices increase by 10% or 20%? Consider factors such as pricing, credit terms, staffing, stock levels and overheads.
If you are uncertain, tailored advice from an experienced business advisor will greatly help you to chart a steady course.
This article was first published in the Mercury Bay Informer of 2 October 2019. See www.theinformer.co.nz
