Despair, gloom, isolation, depression...all the words we may hear during this global pandemic. With this current state of depressed yet recovering economies throughout the world, many small business and SME owners feel there’s no need to plan. Rather, one may just choose to endure the cycle as best as possible, hoping for a brighter future. To the contrary, planning is a must to ensure a bright path forward. As we witness the early stages of recovery, sustainable long-term growth will be a byproduct of planning rather than either doing nothing or irrational decision-making.
There are a multitude of strategic approaches a business can implement. With each approach being equally successful, a competitive marketplace is created. However, if a business doesn’t have a clear idea around its strategic approach, it cannot make decisions that will ultimately lead to accomplishing their predetermined goal(s). Whether a business is experiencing either lower or higher than average growth, a business must be confident in what direction it wants to move in order to better position themselves within their competitive landscape. Examples include but are not limited to: striving to be a low-cost provider, having either a higher quality product or service than the competition, or focusing on a narrow market niche.
If a business is not completely sure of what strategic approach it’s undertaking, now is the time to perfect and market an approach that is most likely to secure business not only currently but also in the future.
Although 2020 YTD revenue for a majority of businesses is lower than expectations, marketing is essential to keep brand awareness alive and well for not only existing customers but also prospects. While we understand one’s marketing budget has significantly decreased, it’s important to concentrate on those marketing tactics that will produce the most revenue for the expense. As the business starts to take an upturn, then the marketing strategy and components can be changed. Marketing is an integral part of any business and cannot be simply ignored even during times of trouble. It’s an opportunity for a business to not only connect with current customers and identify potential customers but also convince those prospects that its products and services have intrinsic value to meet their needs.
Strategic alliances can be a viable growth option for many small businesses and SMEs. It can be a way to monetize what a business has to offer with either little cost or liability. Forming the right alliances can improve market access and allow small businesses to gain entry into markets that would, otherwise, not be open to them. When business is slow, the time might be right for businesses to investigate what type of alliances might be a good fit and then start communicating with potential alliance partners dependent upon their industry. For example, these alliances may include but are not limited to: lawyers, CPA’s, insurance agents, financial advisors, or contractors.
Financial Analysis & Budgeting
Financing and budgeting are certainly essential elements of planning. A business must plan to ensure sufficient capital is available for operations, asset acquisitions, debt servicing, or possible expansion as near-term and future cash needs must be anticipated. Additionally, small businesses should investigate various governmental assistance programs that are available such as either the current CARES Act or funding programs available through the Small Business Administration (SBA). Ultimately, without proper financial planning, the operations of a business can come to a standstill quite quickly.
Although many businesses have unfortunately had to either furlough or layoff employees during the pandemic, these same businesses must plan when and how many employees it will rehire. Furthermore, business owners will need to consider if skill sets in the future will differ from the pre-existing skill sets today. In other words, will the business become innovative and pivot its model to sustain revenue and operations for the foreseeable future given the new landscape among Covid 19? Additionally, it’s important to note the best products or services cannot be either sold or provided without quality employees. If employees were laid off, businesses must consider if those same employees will be available when operations restart at full capacity. Consequently, if new employees are to be hired, the business must have proper onboarding and employee training implemented to facilitate operations at full capacity. Since employees are the most valuable asset of a business, it’s evident that employee planning is certainly an important piece of overall general business planning.
Although survival rather than planning might appear to be the wiser choice on any given day, small businesses and SMEs must understand that while the time required to create a viable long-term plan may result in a short-term loss, it will yield a long-term gain. Proper planning today with forethought for the future allows for implementation within a reasonable timeline. If either a small business or SME waits until “the time is right” before planning and executing action, opportunities might very well be missed. To become successful in any area of your life, you must plan to create either a blueprint or a benchmark to guide yourself in accomplishing the goal. In other words, for a business, this step is valuable in creating a roadmap to guide a business to success. While a business’ irrational decisions may beat the competition short-term, it’s certainly quite rare. Ultimately, effective planning, efficient execution, and patience are interrelated pieces to ensuring a rational, yet positive outcome that will prove quite successful in our path forward.