Approaching your business strategy in the new normal
Business owners and employees in South Africa had an immensely challenging 2020. It is important that you as a business owner start focusing on your business strategy for 2021 and the new normal, because the assumptions that sustained your business might not be relevant anymore.
As a business strategist, I would like to share three steps that Outsourced CFO follow to help our clients approach their 2021 and new normal business strategy:
SWOTT analysis tool
As management, perform a SWOTT analysis on your business. This will allow you to be agile and assist in making informed business decisions. Examples of the new normal impact on your SWOTT analysis are:
- Strengths and opportunities Global opportunities available in e-commerce and online consulting
- Weaknesses and threats Ineffective remotely working software capabilities and competitor threats
- Trends Industry trend changes, including consumer spending pattern changes and e-commerce trends
How to forecast your future business
It is difficult to navigate the future and forecast your future strategy, because there are so many unknown variables. Examples of the new normal impact on your business assumptions are:
- Consumer spending patterns, including market penetration and sales forecast
- The going concern of key partners which could influence strategic alliances and product costing
- Currency fluctuations on imports
- Doubtful debt
- Extreme cost cutting required in future unperforming departments
Be proactive with your financial forecasts of your future business. Try and sketch out two or three different futures that could turn out for your business. Then carefully assess the likelihood and cash flow runway of each of these different futures. This will allow you to be proactive and make informed business decisions well in advance, preventing unnecessary cash flow burn and being a by-product of your circumstances.
One-page quarterly 90-day plan
At Outsourced CFO we like to focus on the one-page quarterly 90-day plan. Management overestimate what they can achieve in a month and underestimate what they can achieve in a quarter. The plan covers the main pillars of the business, namely client acquisition and sales, marketing strategy, product/service offering, people, finance and operations. Under each of above pillars, ask yourself what you want, why it is important, and how you will get there. ‘How you will get there’ will take shape in the key action steps to be performed by management over a period of 90 days. This will help you as management to be aligned on the key focus areas to grow your business optimally every quarter.
Outsourced CFO make use of world-class financial software (Floatapp.com, Spotlightreporting.com and Xero.com) to allow our clients to have access to real-time rolling cash flow forecast scenarios and make informed business decisions well in advance.