NEGOSENTRO.COM | 2020 Must-do List for Small and Medium-Sized Enterprises | If 2019 is anything to go by, 2020 looks set to bring with it its share of highs and lows. Business conditions are still exceptionally vulnerable to both global macro-economic and geopolitical risks. Closer to home, the enormous human and financial costs of the wildfires have seen the year off to a difficult start.
In this challenging environment, it will be those businesses that best plan and prepare to navigate the risks and opportunities during 2020 that will survive and thrive this year. So what is it the must-do list for small and medium-sized enterprises as we head off into 2020?
Revisit 2019’s Challenges and Wins
The start of the year is an excellent time to assess where your business stands as you head into 2020 by evaluating the successes achieved and setbacks you overcame during 2019.
Understanding where you did well and where you could do better will hold you in good stead by helping you build on your successes and learn from the missteps you may have taken last year.
Did you encounter any cash flow problems? Were their issues with customer service? Did you have sufficient, or too much stock, to meet demand? Did customers have an appetite for what you offer? These are just some of the questions you should be asking as you head into 2020.
Scrutinise the State of Your Business Finances
Now, look at the numbers and see what story they tell you about how well your business is geared to meet the demands of 2020. Check if there are any weak areas that you need to consider in strategising for the year ahead. For instance, was cash flow an issue? Is your customer base diverse enough? Are you managing inventory as well as possible? Are you balancing your budgets?
Understanding the exact state of your business’s finances allows you to take proactive steps to ensure they remain, or become, healthy during 2020. It will help you set the revenue targets you need to achieve, cut expenditure if and where required and plan for growth.
It’s also worthwhile assessing the payment track records of your existing customers and sorting your customer base into those that are prompt payers and those who are late or unpredictable payers. As cash flow provides the lifeblood for your business, you need to make sure that you are in a strong position to handle any potential disruptions to cash flow proactively and efficiently.
Assess Business and Competitor Landscape
It is often difficult to remain on top of the latest trends in your industry that may impact what you offer. Also, in a fast-paced, increasingly digital, market place, it becomes all the more important to check in on what your competitors are doing. Existing competitors can change tack without you realising it, and this could well have an impact on your bottom line. New, innovative competitors can change the landscape altogether.
Given the uncertainty and risks that have become staples in the business environment, it has never been more important to assess your stress, weaknesses, threats and opportunities with your competitors in mind.
The start of a New Year is a fortuitous time to do your homework, get the lay of the land and identify changes and opportunities you may need to address in your business approach and strategy.
Strategise for Maximum Growth
If you don’t have your 2020 strategy locked and loaded already, you need to get onto this urgently. Operating your business according to a detailed and ambitious plan is the only way you are going to maximise the growth of your business during 2020.
Challenging conditions are no reason not to aim for stretch growth targets. It is during times like these that a business, operating in single-minded pursuit of specific, well-considered growth targets, can achieve performance well ahead of the average competitor.
Prepare for a Financially Fruitful 2020
Now that you know the existing state of your business finances and what you want to achieve during 2020, you can determine whether your current financial situation will support your growth ambitions or whether you will need to seek financing to make these.
In many instances, it’s not business loans that will help you grow but smooth and predictable cash flows that will carry you through the year unencumbered. To keep your accounts receivables book in its best shape, revisit your assessment of your customers’ payment histories during 2019. Assess whether you need to put alternative financing arrangements in place, like invoice financing, so that you can be sure that non-payers or late payers don’t disrupt your desired business growth trajectory.