Executive Corner: Four Action Items to Help Move Your Firm Forward
As we come to grips with the current economic landscape and ponder the post-pandemic future, it’s natural that negative feelings arise. We have the choice, however, to let these negative emotions debilitate or energize. As owners or leaders of our businesses, we can’t afford to let emotions get the best of us; and I believe, from personal experience, that the most-beneficial way to deal with these feelings is to take action. In this column I suggest a few actions you can take right now that will get you moving forward in a positive way as well as better position your business, no matter the future circumstances.
First, however, let’s address the elephant in the room: the one that’s lurking in the back of our minds. Allow yourself—just briefly and in the safety of this column—to picture the worst happening. What would that look like, and what would you do? You might imagine that you lose 50%, 75% or 100% of your business. What would you do? Retire early? Get another job? Re-group and keep going? Close up, sell all your belongings and subsist on cat food, living in a cardboard box behind the 7-11?
The point of my tongue-in-cheek example is that the worst hardly ever happens, and, if it should, it’s hardly ever as bad as our reptilian brain imagines. And now we can move on to taking positive action. Here are just four ideas to get you going:
1. Business Plan: I read that most business owners spend more time planning their yearly vacation than they do planning the future of their business. If you have a business plan, now would be a great time to dust it off and update it with any new information that has come to light. If you don’t have one, why not at least get started on one? Your business plan should be, of course, written and feature a rolling two-year timeframe. Things change so rapidly nowadays that trying to plan ahead more than two years isn’t a wise investment of your time.
2. Ownership Transition Plan: It’s inevitable that you will transition your business to someone else, either through an internal or external transaction. This is something you should plan for, as leaving it to chance circumstances will almost certainly cause you to leave money on the table. Because a successful transition plan could take up to 10 years to execute well, there’s no time like the present to get started. If you have a transition plan, has the current landscape necessitated a change?
3. Accurate Financial Information: Not knowing exactly how your business is doing can have a negative impact on your disposition, confidence and ability to plan for the future. It’s absolutely critical to make decisions based on accurate information. Yet we see that many of our clients’ financial information is inaccurate, untimely or otherwise not meeting their needs. If your intent is for your business to continue in a profitable manner, why not invest in processes, systems and people that will arm you with the information you need?
4. Forecasting: Our most-successful clients—the ones in the top quartile of their peers—forecast their billings, expenses (and thus profitability) and cash flow. With our clients who don’t forecast, the common theme is they don’t know how or don’t see the value. They don’t realize it’s not very difficult to produce a forecast, and the value isn’t just in the resulting forecast itself, but in the discipline of doing it and the conversations that result. If you’re not forecasting your business, you might not see the proverbial train coming down the track until it’s too late.
These are just four among many actions you could take right now that would have a positive impact on your business. By focusing efforts on things you can control and influence, you will energize your business and position it for success as our economy inevitably improves.