Carrying out a regular assessment of your company’s financial health is a great way to familiarise yourself with general areas in which you can improve, while also helping you to see bigger issues coming your way. Some of the factors impacting your business performance will be outside of your control, but there are many things you can do to prepare yourself for the tough times, if and when they happen.
Here are four tips for how you can start improving your business performance today.
1. Assess your position
Before you can really start to get down to it and work out where your company needs to improve, you’re going to need a clear understanding of your business’ position in the market. It’s much easier to identify what the factors impacting your performance could be.
As a good starting point, it’s recommended you carry out a SWOT analysis (strengths, weaknesses, opportunities and threats). By pin-pointing any internal and external factors that might be having an effect on your business, you can begin to generate some ideas of how you can minimise or encourage those effects.
Your SWOT analysis doesn’t need to go into too much depth, as the things that come to mind most easily will be a good starting point, and will uncover more complex issues in time. It’s important to seek the opinions of everyone in your organisation, as you may not always have eyes on every individual sector of the business.
2. Set clear, achievable goals
Once you have brainstormed some more specific areas to work on, you’re ready to put some form of strategy in place to improve your performance. It’s all very well to want to make your business work better, but until you have a clear vision of how to do that, you can find yourself floundering.
After establishing some priorities within your business, you can begin to implement strategies that focus on those areas. This can mean anything from freeing up more financial resources for certain departments right up to restructuring some or all of your company internally.
CPA Australia suggests implementing a clear strategy that can be easily monitored. It’s not just for gradual business improvement, but also to identify and address crisis situations before they can do irreparable damage to your organisation.
3. Don’t be afraid to take risks
If your small business has found itself in financial strife, salvaging it to the point where you can start to rebuild can be a very challenging process. Along the way you might have some tough decisions to make, decisions that often have a slim margin of error.
For example, if you have already exhausted most of your options, you may ultimately want to consider administration and/or liquidation. This comes with unique risks, chief amongst them the possibility that restructuring your business will not generate enough capital to repay your business debts.
With that in mind, it’s possible that through careful consideration, and consultation with experienced liquidation professionals, non-essential assets and unprofitable departments can be sold and or restructured to improve your bottom line. The ability to recoup the finance you require to ease your company’s money problems is an example of an external risk, meaning you’ll have little or no control over the outcome.
As the saying goes, however, fortune favours the bold, and being afraid to make some tough calls isn’t likely to improve your business performance. Rethinking what your business is capable of, and where a more comprehensive overhaul might be possible, could be just the change you’re looking for.
4. Bring in some fresh eyes
In some cases where you’re deeply ingrained in your operations, particularly if you started the business yourself, it’s possible to be too close to the company. Being unable to maintain sufficient emotional distance can cloud your judgement, possibly leading to inaction just when you need to make the tough decisions.
One way to avoid business stagnation is to bring in new personnel, in particular people specially trained and experienced in matters of business performance. These can either be permanent hires as part of a long-term strategy, or short-term contractors and consultants brought on board to target specific objectives in the immediate future.
If you are considering a restructure, for example, bringing in outside consultants can free you from any drawn-out recruitment or training processes, allowing you to focus on those areas where you can create the most value. On the other hand, should you be considering more drastic action such as liquidation or administration, there are experts available to guide you through every step of the process.
At Corporate Lifeline, we offer an array of options for small businesses facing financial difficulty, including liquidation, solvency analysis and restructure consultation. If your company is experiencing challenging times, make an appointment with one of our team today.