Better Business
Issue Thirty Seven
Strategies for 2010/2011
1. Cash is still King!
We make no bones about it. Cash flow will continue to be high for the next 12 months. Manage your debtors carefully, ensure you are in constant communication with your bank and do not fall into the trap of over-trading as we come out of the recession.
2. Grow sales revenue
I am yet to come across a client that doesn’t want to grow their sales this year. The problem is, we got used to unsustainable levels of consumer spending in the past so sales across most sectors simply grew despite limited investment in this area. We see a strategic approach to sales and marketing through differentiation providing more value and creating customer loyalty as a key area for 2010.
3. Drive efficiency
“Never waste a good recession!” Many of our clients were forced to look at ways of streamlining business, trimming fat and improving productivity as revenue fell across the board. This year, as revenue improves it is important to maintain their focus on efficiency so that the gains in revenue flow through to the bottom line.
4. Employees
Training seems to be one of the first things to go when times are tough, but to be sustainable our businesses must continue to invest in the best people. Training budgets must be increased (or re-introduced) and leadership and talent development must take centre stage. For our economy to thrive our levels of productivity and engagement need to explode.
5. Re-thinking and Re-shaping strategy
SME’s need to adopt larger corporate models of investing in strategic thinking, good governance and complementing advisory boards to set themselves up for the future. There are many risks ahead, so having a talented experienced team of advisors to consider future opportunities, balance sheet strength, working capital structure, operating models, competitive advantage and market positioning will become critical.
6. Keep an eye on legislation
We don’t expect too much interference from the NZ government although two changes and simplification of the RMA and employment legislation will be welcomed. For those that are exporting, keep a close watch on the steps governments take to protect their economies as governments begin to unwind the economic stimulus packages they put in place.
7. Know your market
All too often we see companies who are trying to grow market share embark on an aggressive marketing and advertising campaign without truly understanding what their customers are asking for. We believe that there are significant opportunities for those that are smart, and knowing your customer, your market size and your market share are absolutely critical factors. Ignore them at your peril!
8. De-Clutter and simplify
Over time, most businesses develop processes and service lines based on immediate need. When the business model changes, those needs can easily become outdated and the commitments irrelevant to current conditions. Drop outdated products, services and commitments, simplify processes, de-clutter the business and ensure that the value chain is preserved or restored.
9. Co-operate and Collaborate
Strategic alliances are no longer enough. The days of having a nice catch up with strategic partners are over – as is the 6 hour lunch with no result! It is time to co-operate with non-competitive like minded businesses who share the same or similar market, and time to collaborate with businesses within your supply chain.
10. Show Leadership
A strong business needs true leadership through the challenges that we are currently facing. There are many excellent definitions of leadership which can be adopted depending on the circumstances, so here are some ideas for now;
a. Sight – see emerging patterns and shift perspective
b. Insight – learn faster than the rest
c. Create – think strategically and sustainably
d. Communicate – collaborate inside and out
e. Inspire – mobilise support and engage others into action
Conclusion
We are not out of the woods yet, but positive signs are there. Be smart, be careful, but be sure to act in order to take advantage of the opportunities that will present themselves.
Disclaimer: Information contained within this document is of a general nature and does not constitute advice. Readers are cautioned not to act or rely on it without first seeking professional advice.
