How to steer your way through the Covid-19 recession.
At this stage we can only imagine what a pandemic really is like, and what impact it will have. Health professionals are saying nobody is alive today who has lived through a phenomenon like Covid-19. And they added it could last up to two years.
The probability of a global economic recession is high.
Whilst our own, and our loved ones and our community’s health is paramount, attention also needs to be given to the health of our businesses. This is the focus of this blog.
You need hard data. And you’ll need your numbers to be up to date every day. So here’s some tips I’ve been collating. I hope each one provides food for thought, and is actioned.
7 Tips to Manage Your Business Through the Global Recession:
Keep in touch with your major clients so you can find out as soon as possible which contracts are going ahead and which are likely to be postponed or cancelled.
If you haven’t already got one, you need a cash flow through which you can run multiple scenarios - best case - worst case - most likely. This has to be up to date. Each reforecast should be projected out at least a year ahead. It will be your decision making tool. Do we need this project. Can we afford to take on more staff. Can we afford to keep all our staff. We know of excellent cash flow systems we can refer you to.
Concentrate on revenue. Push projects through and get them out the door ASAP. If you can afford to do some things on a goodwill basis then good for you. But if things become tight, goodwill won’t pay the bills. So signal variations as soon as they arise.
To maximise revenue, plan time ahead. Staff need clear expectations of how long each piece of work should take. You’ll blow your budget and hurt the business if staff regularly spend 30 hours on 20 hour pieces of work.
Reduce staff hours if needed. Staff will understand and appreciate you’re at least keeping them on the payroll rather than laying them off or going bankrupt with 'all hands on deck'. In either of those last two cases, they’ll be worse off.
Get your invoices out ASAP. Don’t wait until month end. Also ask for nominal deposits up front if you can. If you don’t ask you won’t know if clients will accept this request or not, nor if they’re willing to pay.
Use cloud based commercial software. Your in-house IT or spreadsheet expert might be the salt of the earth. But you can’t afford the risk of them going into self-isolation or heaven forbid becoming seriously ill. Your business could be ‘flying blind’ if this person is away. So while commercial software mightn’t be the same as your home grown system, it will be as good if not better. It will have the reports you need to steer your business through. Plus, cloud based also means people can use it from anywhere, so you won’t need the costs of remote desktop connections to your office network if people are working from home. And being cloud based and commercial you’ll receive updates without the need for people in your office to do the installs.
So which other numbers do you need to know? Find out from our short videos here.
During the last economic downturn, we surveyed our clients. One of our clients increased their revenue by 25% by using Abtrac.
Here are some other responses, taken from our post-recession client survey.
“When times were tight we learnt that making every hour count made a big difference to our bottom line. We continue to make every hour count and Abtrac continues to make a big difference every month. We couldn’t do it without Abtrac.”
Cost Estimators, Brisbane
“Abtrac has been really fantastic at helping us develop tight business processes and really keep control of the financial aspect of the company.”
Surveyor and Engineering Firm, Wellington
“The support we receive from the Abtrac team is not only software training, but also confidential business consulting and professional advice if we need it.”
Consulting Engineers, Sydney
Contact us if you want to know more about how to protect your business, or to discuss moving to Abtrac Online, our cloud based software. As always we’ll be very pleased to respond.