Hello, I have been talking to many businessmen in the last two weeks, they ask me: knowing that we are ending the health emergency: What are the aspects that I should direct my attention to from now on? What to do after the pandemic?
It may seem confusing to know where and how to go, but there are aspects that are key no matter what you do that you cannot ignore. For this reason, I will share the following points that I consider important, but even better I will give you some of the critical questions that you must answer and even investigate in your company in order to improve, so take a pen and paper to spend a few minutes answering, it is time to take action in your organization!
What to do after the pandemic
First
Speak and reassure your clients, you have to remember that a 5% increase in retention can become an increase of up to 50% of your profits, it is essential to generate creative ideas to improve customer service. Answer the following questions:
- What is my retention in % and in time from each of my clients currently?
- What can I do differently to ensure a better shopping experience?
- What is the reason why my main customers buy from me?
- How can I implement a different way to communicate with them and keep them loyal to my business?
Second
Focus on keeping your employees as good as possible. Without them, business will be much more complicated. It is important to understand that culture destroys any strategy if it is not the right work culture, it must be firmly rooted and lived by all your collaborators, therefore it is important to create 1 to 1 relationships with each one of them, so that they know not only about word, but action that they are important and that they can trust you, that they perceive that you are willing to help them. To do this, I suggest you answer the following questions:
- What is the work culture I would like to have within my organization?
- How can I get closer to each of my collaborators?
- How can I show each of them that they can trust me?
Third
It’s making cash flow forecasts week by week for the next three to nine months. Do different scenarios. Remember that cash flow is the blood of the business, as I say in my finance training, it is more important than your mom to the business. If liquidity was a fundamental factor in the health crisis, it is time to learn the lesson and not allow this to happen again. If you have not prepared your projected cash flow report, today you must do it yes or yes.
What we need is realism and action. The need to make a cash flow forecast applies to all businesses: large, small, medium and micro. I would say that especially the micro, small and medium segments are at a greater disadvantage because they are not used to carrying excess cash.
Here are some questions that you must answer when projecting it.
- What do you expect to be the realistic behavior of your sales and by what magnitude are you forecasting that they will increase or decrease?
- What can you implement in addition to your current actions to improve your collection?
- If you manage inventories, what is the mix of products that you must maintain and which are the ones with the highest turnover? How many sales do I lose per product denied?
- How can I increase the credit term with my creditors?
- How can I increase the payment periods with my creditors without altering the relationship with them?
Fourth
Now that things seem to have a better picture, it is time to place a policy of having a flow of at least 3x the monthly operating cost, better if it is 6x or 12x. When are you going to achieve this? I don’t know, but as soon as you start to take control of your projected flow, you will be closer to achieving it.
To achieve this with the projection of your cash flow, make sure that your cash balance grows month by month. The additional amount that the company generated in that period, I suggest you divide it into at least 3, in such a way that you leave a part to increase your balance in flow, the other part to reduce the balance of your debts and a third part you can withdraw . If you do not have debts to cover, leave 2 thirds as an increase in your flow.
Finally…
As obvious as it may seem, please make sure you don’t spend more than what you earn, neither in your company nor in your personal finances. The flow of money coming in should always be faster than the money leaving your organization. Do not take it lightly, because despite the fact that we can begin to recover business, it requires liquidity to grow, so making your projection right now is essential. On the other hand, sad news: you will have to do this yourself, your accountant will not do it, he cannot do it mechanically and make projections based on the usual percentages. If you have a financier who supports you, go ahead! Otherwise you should do it with your work team: vendors, collection administration, etc.
You have to create scenarios, if you consider these 3 pillars in your planning: clients, collaborators and cash, it will be of great help to get ahead, remember that it is time to test your courage and your resilience. Planning and setting goals is probably one of the most important tasks in how you can take advantage of your time right now, it is a time for opportunities, prepare now: and additionally answer these questions:
- How can I take advantage of my resources to get out with the right speed and quality?
- What do my customers and prospects need to seize the moment too?
- How can I be better?
- What products or services can I develop now to better serve?
- Specifically, what is the strategic objective to meet next year?
Change your structure, and if necessary reduce expenses. This is the time to be prepared, take the lead, inspire, motivate, analyze, go forward, talk to your people and don’t waste this great opportunity. It’s time to reinvent yourself and get ahead.
Remember that from my point of view a business is an “intellectual sport that generates free cash and works for the owner”, and today more than ever, the intellectual part of thinking critically about the different options to get ahead is essential.
Jorge Arturo Chavez Entrepreneur, business coach and executive coach, speaker and author of the book: “Grow your company, dare!” best seller on Amazon, where it embodies the training discipline that every business owner must maintain.