Sofema Online (SOL) www.sofemaonline.com offers survival guidance for your business
Use the Team Approach to Optimisation
Without doubt, the front-line staff have the highest level of exposure to any shortfalls. Therefore, it is worth engaging with team members and encouraging them to propose ways to streamline and simplify processes and to identify cost reductions leading to efficiencies.
Bottom-up Budgeting
Bottom-up Budgeting (BUB) it’s a process that starts at the front line and moves up through the business channels with the objective of everyone involved in each business area focusing on delivering a 10% cost saving.
Manpower Requirements
It can be seen during business reviews that certain business areas are usually performing far better than others. It is worthwhile to use this information as an enabler to review staffing needs over the next 6 to 12 months for each particular area.
This is the time to consider relocation, re-training and in the worst-case redundancy.
Open and honest communication can be a motivator, by involving the maximum number of people, we should strive to effectively explain the business strategy and get their buy-in.
At the same time to manage expectations about forthcoming pay rises to come. If possible, consider the potential of offering other benefits such as amended hours, flexitime or additional holiday.
Consider the possibility of moving to annual hours contracts. This can save overtime costs, whilst providing job security.
Business Process Optimisation
Now is the time to review your full list of products and services and eliminate those that are unprofitable or not considered core activities. Grow in areas which show promise and involve “Team Members” in discussions regarding expected trading conditions and get their input on any opportunities to reduce costs whilst maintaining revenues, always strive to communicate honestly and frequently.
Could there be a Growth Opportunity?
Whilst business valuations may be historically low an opportunity arises for companies which are in a strong financial position in as much as there is an opportunity to grow, to approach weaker competitors with a view to acquiring them.
Working with Key Performance Indicators (KPI’s)
Establish your key performance indicators (KPIs) and measure them frequently.
Sales Leads generated, Orders supplied/fulfilled, Cash balance, Stock Turnover, Debtor Days, Gross Profit, Net Profit.
What to do if you do not have confidence that your Business will Survive?
If you have concerns that your business is unlikely to survive, consider opportunities to sell your business. Whilst it is unlikely to be easy to achieve a sale it is far better to have a limited outcome than to see your business crash into failure. Of course it is challenging to let go of something you have built even when this is the best outcome.
Should we outsource?
What to do with Non-core activities?
Consider available alternatives such as outsourcing any relevant activity either locally or overseas. In fact, they can be converted from fixed costs which are incurred at the same level throughout the business cycle into variable costs by the use of outsourced supply.
Aviation Leadership & Management Skills Development Diploma
Are Leaders Born or Made?
Behavioural Theorists believe that people can become leaders through the process of teaching, learning, and observation. Leadership is a set of skills that can be learned by training, perception, practice and experience over time. Leadership learning is a lifetime activity.
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