How business owners can balance short-term survival with long-term opportunity

Some people see the coronavirus crisis as an opportunity to redesign their businesses, while other people are stuck. How do you accelerate out of a bend? It’s possible to balance preserving what you have with planning for the future; the actions you have to take in the short term can create long-term value. 

We work with founders and business owners every day to support them through the planning process, helping them create long-term value in their businesses. Here are a number of practical steps we’ve been going through to help them respond to the crisis.

Carry out zero-based P&L planning

The crisis provides the opportunity – or necessity – to start from scratch. Zero-based profit and loss planning allows you to allocate money where it matters most, rather than basing investment on your budgeting history. You can align what you’re spending with the priorities, challenges and opportunities created by the crisis. 

We see lots of businesses where resources tend to get stuck where they have always been. Budgets for different areas of the business are tweaked each year, rather than properly assessed and prioritised. This restricts innovation. Use the crisis as an opportunity to break that cycle.

Identify opportunities for product development

The products you’re adapting or creating for the current situation will help you identify opportunities for developing your proposition; you need to strike a balance between short-term necessities and a push into the future. 

Often this means moving businesses online and the digitisation of your proposition. What online products can you offer? Are there opportunities for ecommerce or affiliate sales? Look at parallel or left-field business models to get inspiration. As a coaching company, for example, we’ve looked at how gyms are taking their services online. 

Use the time to think about R&D and moon shots too. Advertising costs are low and there’s lots of talent available. What is the future of your sector going to look like? Reimagine it with a blank sheet of paper and book time in your diary to work on it.

Restructure long-term commitments

It’s likely you’ve already done the initial firefighting and looked at the government support that’s available. It’s also an important time to reevaluate the future funding of business and any long-term commitments. For example, office space and asset financing.

Many businesses have been forced to create an infrastructure for people to work from home. While some employees will flounder, it’s an opportunity to provide flexible working and a new way of using offices to those who want it – and reduce costs. Just remember that the real-world interactions people have are important and think about ways you can support that.

Protect your clients and do the right thing

Increase the amount of communication you’re having with clients, suppliers and any stakeholders that are important to your business. It’s absolutely crucial to strengthen and build relationships.

If you have the capacity, it’s an opportunity to increase the amount of content you're sharing. People are more interested in thought leadership than ever. What can you offer that’s new?

Be aware that consistency and credibility are key to effective communication. Messaging that doesn’t fit the existing relationship and style of communication can erode trust; authenticity is vital.

Increasing the volume of content builds a network effect. The more you develop and share, the greater the impact you have and the volume of relationships you build.

Reconciling the new world with your old KPIs

Don’t beat yourself up about missing your targets. This is a force majeure event and it’s okay to hit the reset button. Businesses may be able to get back to where they were, but it will take time.

Spend time getting stuck into understanding your business. You need quality financial information to be able to make good decisions. If you don’t have it already, developing a strong cashflow forecasting process is absolutely crucial.

What other data can help you understand the situation? What external information can you use to develop your thinking about the future? It’s really important to talk to your customers during this process. 

As you’re doing this work, think about the repeatable processes you can develop and embed to provide insight in the future. The best performers we work with embed the decision-making process and keep improving them.

You need to innovate to stay relevant

If you focus too much on short-term survival, you’ll become uncompetitive. It doesn’t matter if your business hasn’t been impacted by the crisis, you need to innovate to keep up with your customers and competitors. If you’re in a business that’s in dire straits, it’s the same process but with different options.

Make sure you create some headspace to think about the long term and do your research – book it into your diary now. You have an opportunity to build a business that’s better than ever and it’s not one to be missed.

Want to talk through your options? Book a 30-minute exploratory chat with Richard.