The importance of planning in times of crisis
Do you have a plan for your business? Planning ahead can help your business maintain stability during uncertain times. Here are 5 reasons why.
COVID-19 has generated a lot of uncertainly among small business owners. We’re in uncharted territory, and even the most seasoned professionals are unlikely to make concrete predictions. One thing is certain for businesses: those that can respond and adapt to the crisis are more likely to come out the other side. That’s why having a plan in place can be one of the most effective ways to help your business do just that – even when you don’t know what the future may hold. Here are five reasons why.
The people who buy your goods or services might be holed up at home right now, but if you consider how their behaviour may change over the coming months, you’ll be in a much better position to meet their needs.
Perhaps some parts of your business will turn out to be more in demand than others, or some segments of your client base may change the way they consume your goods or services. Having a plan in place to market to changing segments or switch your focus to a new area shows your customers they’re at the centre of your business.
Understandably, many workers are concerned about their jobs during these uncertain times. Will they still have a job in six months’ time? Will their hours be cut? Showing your staff you have a plan for how you’ll work through various eventualities, such as small or big drops in revenue or disruptions to operations, can help ensure they’re ready to deal with whatever comes next.
Redundancies in small business are never easy, but helping your employees understand what your business is doing to combat the challenges you’re facing, and why you may have to make some very difficult decisions, might help you part on better terms.
Even though you don’t know exactly what’s going to happen next, mapping out potential scenarios can help you identify what might happen in the future. This way, you make informed decisions and, crucially, reduce potential risks.
If you know what to do if your revenue suffers a mild decline or some lines of business are no longer profitable, you can implement your contingency plans. Without one, you may be forced to react without having time to consider what’s best for your business down the track.
‘Pivot’ is the buzzword of the moment, and it’s easy to see why. Consumer behaviour has undergone a dramatic shift and businesses that can adapt and change are much more likely to cope during the COVID-19 crisis.
But pivoting without a plan can pose significant risk to your business. Exploring new revenue opportunities, such as moving to an e-commerce delivery model or producing in-demand products, requires consideration, research and a sound strategy in order to be successful.
The COVID-19 crisis is having a serious impact on our mental health, especially among people working in small businesses. Everything from managing cash flow and negotiating a rent reduction, to making someone redundant can add to your worries and make you feel stressed and anxious.
Knowing you have a plan for how to deal with whatever happens next can help to alleviate some of these feelings and improve your mental health and wellbeing.
Even though you may not know what the future holds, having a plan in place can help give you and your business a little bit of certainty in an uncertain world.
This information does not take into account your personal circumstances and is general. It is an overview only and should not be considered a comprehensive statement on any matter or relied upon. Consider obtaining personalised advice from a professional financial adviser and your accountant before making any financial decisions in relation to the matters discussed in this article, including when considering tax and finance options for your business.