What does it take to make your care business more resilient in these uncertain times? Find out in this month’s insight.
Steering a business through these unpredictable times is a challenge for all of us. If the COVID-19 outbreak has shown is one thing, it’s that being both resilient and adaptable are paramount.
Resilience is about a company’s capacity to absorb stress, recover and ultimately thrive.
It’s the difference between the pubs, restaurants, retailers, airlines and hotels that have held on through the lockdown, compared with the ones who quickly folded.
No business can ever truly be bulletproof, but that doesn’t mean there aren’t steps you can’t take to shore up your operations, both right now and for the long term.
Follow our 8 tips for building more resilience into your business:
1. Have a plan – for everything
Most businesses have some form of continuity plan in place, but few would have anticipated a global pandemic in their lifetimes. The ability to anticipate, adapt and act is invaluable for business leaders.
Gather your senior management team and think through all the potential scenarios and outcomes that could impact on your business.
What happens if you need to close for a few months? What will you do if 90% of your staff get sick? Run through simulations and measure how effectively you’d cope.
Evaluate the risks associated with each scenario, and develop contingency plans outlining the measures you’ll put in place now – or if something happens in the future.
2. Build a financial safety net
Having a cash buffer is important for all businesses, but for small businesses in particular, it’s not just important – it’s essential. We already know that the number one reason small businesses fail is lack of cash flow.
Combine that with the possibility that businesses may need to weather a second lockdown at some point, without knowing how long the government’s furlough scheme may last, and the need to build up a financial safety net becomes clear.
Aim to put aside 3-6 months’ worth of revenue for the unexpected.
3. Diversify your customer base
Many businesses make the mistake of putting all their eggs in one basket, relying almost entirely on the business of one large customer. For care businesses, this is often a Local Authority.
While big customers are obviously a clear benefit for your business, it does put you in a potentially vulnerable position.
If you lost their business, they changed their payment structure or delayed payments, would you survive? Try to broaden your customer base as widely as possible to minimise risk.
4. Maintain your focus
Business owners often wear far too many hats, taking their attention away from the more strategic, operational aspects of the business and onto smaller, day-to-day tasks that could be managed by trusted team members.
It’s easier said than done, as many of us naturally want to feel we have a clear idea of what’s happening in every part of our business, but for the foreseeable future, maintaining your focus on business performance and continuity is key.
Delegate wherever you can.
5. Strengthen your partnerships
Strong partnerships are just as important to your business’s resiliency as your staff and your customers.
The businesses you choose to partner with can help you to minimise future disruption, from your key suppliers to your business networks.
Forge industry alliances wherever possible, and ensure your supply chain is as resilient as you are.
6. Don’t stop improving
Right now, there’s a tendency to just plod on and keep going. That’s understandable; we’re all pretty exhausted and anxious after the last few months.
But don’t forget that there are lots of things you can do to keep improving as a business, even during a lockdown.
Use quieter periods to seek feedback from your team, your customers and your partners. What’s going well? What could you build on? How can you continue evolving?
7. Stay flexible
Flexibility and adaptability are both key to a resilient business. While we can’t all pivot to making PPE, for instance, we can still make sure our business is flexible enough to adapt to market conditions wherever possible.
Flexibility is especially important if your business model is quite rigid; think about whether there are any aspects of your business that could operate more independently of each other.
This modular approach enables individual elements of a business to fail without the whole company collapsing.
8. Review your systems
Resilience and systems go hand in hand. To an extent, the systems you have (or don’t have) in place could mean the difference between survival and failure.
How effective are your business systems? Can your technology scale up or down with your needs? Are there any digital tools that could automate or simplify operational tasks? Do you have clear processes in place for managing different things? Are your processes robust enough?
A complete review of your systems and processes will help you spot any gaps.
From an accountant’s perspective, we strongly encourage businesses to think about becoming more resilient. To make a start, talk to us today to explore our financial and business support packages for domiciliary care businesses.