10 things to be learnt from 2020
- You can’t predict change but you can prepare for it.
So much happened last year that was unexpected that at times it was quite overwhelming. In the early stages of the year, much activity was reactive and decision making was made on the “fly”. Looking forward, it is now a case of feeling much better placed to cope with whatever “curveball” is thrown. The businesses most likely to have a fantastic 2021 have already planned for it!
- It takes years to sell a business
Many owners said to me that “if only we had prepared an Exit Plan earlier”. Many owners were pushed to the brink, both financially and emotionally. It forced many to consider selling only to find their business was no where near ready. It can easily take two years to prepare for a sale. If the work is not done then the business will not sell, or if it does, it won’t be for an optimum price. There are lots of buyers looking to get into their own business.
- Show me the money
On paper a business can show it is very profitable. But until the money is in your bank account – you are vulnerable to market “shocks”. One of the biggest things we saw with owners was their resolve to collect debt and make sure debtors were managed in a much better way. Less credit, shorter Invoicing terms and obtaining deposits before work started made businesses much more solvent – and stronger.
- Maintenance is cheap – repairs are expensive
Putting off important expenditure just to save money is a short-term strategy only. The businesses that are currently doing well financially are the ones that have planned out their expenditure as part of their overall business strategy.
- Customer service rules supreme
It seems prices have gone up everywhere. In some cases, products have been altered or adapted to a smaller unit size for the same price. There are a few examples of both price increases and unit size reduction! The missing ingredient is Service. Until you have a complete understanding of what your customer wants, then you will not be able to Thrive. At best you will only survive.
What the heck is pivot? One of the “buzz” words for 2020 no doubt. It is a reference to Plan B. In fact, 2020 has highlighted the need for a Plan B, C and even D. One of the largest sources of stress in 2020 came from owners not knowing what to do when disruption came out of the blue. Many found it very hard to switch to alternative operating criteria or develop new products and services. One of the most common conversations we now have with owners is what are the additional revenue streams we could be involved with?
- Staff are the number one asset
The best maintained assets make you the most money.
- No matter how bad things are or how good things are, they will not stay the same
Expecting positive trends to continue up or negative trends to continue down is just wrong. Knowing what to do in either situation comes down to how well you have prepared for it. Your Business Plan should contain specific “triggers” which will spur you to take appropriate actions at the right times.
- Owning a business ‘sucks’
Actually, no it doesn’t. What “sucks” is when the business is performing in such a way it prevents you from doing the things most important to you. Lockdown showed us the importance of family and friends as well as freedom and independence. It highlighted to us that struggling along in a “rut” was no way to be. Many took the opportunity to refocus on what they really wanted to be doing and have put in place strategies to achieve these things. One of the key outcomes from this is, owners planned holiday’s over Christmas and New Year. For many, this was the first time they have done so! A business should be an enabler for you to do all the things you enjoy. If it isn’t then you need to change.
- Glad to see the back of 2020
Be careful what you wish for. I can vividly remember people saying the same about 2019, and 2018…..In fact most previous years! One of the biggest takeaways this year is not thinking things are just going to change for the better because of something like a date change!! Expect 2021 to be a fantastic year for you and your business because you plan to change.
If you want to get that change started contact us now at Prime Strategies we can help you!
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