International volatility, geopolitical division, wars, the impact of ai and supply chain blockages are just some of challenges facing the world economy.
Domestically we are experiencing a cost-of-living crisis, high interest/inflation, negative GDP, poor productivity, crime, political instability and significant changes to tax policy which are all headwinds for private business.
In this blog, I share my thoughts on what business owners should do to navigate through these dangerous seas of uncertainty?
Business Planning
Update your strategy to match your current risk profile.
Set assumptions, projections and metrics that contain a range of contingency factors.
Budget hard.
Double down on planning.
Cashflow & Finance
Is, was and always will be king.
Have a cash buffer or access to cash for contingency (or at least access to cash in crisis).
Review risk re debt and gearing ratios.
Plan for higher interest rates and inflation.
Review expenses and cut back on non-core spending.
Plan for the worst, hope for the best.
Risk
Review and update your overall risk profile for current uncertainty.
Review key personal and business risk against insurances and contingencies.
Reduce or eliminate risk for perceived risks in the event they occur.
Team
Do a stocktake of your people.
Who should get off the bus and who do you need to get on the bus?
Adopt a hustle culture across the business.
Are you ensuring you meet periodically 1-1 with teams and individuals to check in and ensure messaging is clear and current?
Are you paying at or above market remuneration to mitigate risk of key team members leaving or competitors poaching them?
Have you considered introducing (where affordable) compelling benefits, incentives and other offerings to retain the team?
Customers
Get closer to your customers and maintain fluid and honest messaging in all communication.
Ensure you are meeting or exceeding customer service standards.
Update customers on any disruptions, delay or supply chain issues at first instance.
With rising costs, consider the need to address your pricing and include customers in this analysis.
Suppliers
Have you done a review of suppliers to ensure they can guarantee supply on cost, timing and quality?
Have you got back-up suppliers in place, should existing supply be blocked or delayed?
Are your suppliers competitive and offering the best price possible to optimize margins?
Pricing & Margins
Review whether your pricing is above market, at market or below market.
Assess whether profit margins have been eroded by rising costs and implement changes where possible to recover.
Assess what you need to do with your current pricing in relation to this review and current economic uncertainty.
Initiate a periodic pricing review, at least annually.
Products & Services
Does the current climate of uncertainty increase business, sit neutral or detract from your product or service offering?
Are there new products & services, or tweaks to your offering, that would mitigate uncertainty?
Demand
Aim to be as close as possible to full demand.
If demand falls by 20% at full capacity, you can absorb that drop. However, if you are light on demand when demand drops, it may disrupt business or even tip you over.
Productivity, Logistics & Business Administration
Are there any productivity gains you can implement in your product or service delivery model?
Are there any changes to logistics that can improve efficiency or reduce cost of fulfilment?
Review your internal business processes and reduce, eliminate or outsource inefficient/redundant tasks and processes.
Personal Mindset
Optimize sleep to handle uncertainty.
Implement health and mindfulness through meditation, breathing, stretching, exercise and bodywork to maintain physical strength and mental acuity.
Remove or reduce contact with toxic or negative people where possible.
Manage the impact of mainstream media and social media pm your mental health.
Respond don’t react.
Breaks, stay-cations, retreats and holidays
Schedule when possible, subject to your financial strains.
Remember little breaks on a shoestring budget can change things up dramatically.
Be kind to yourself through uncertainty.
Play the long game.
Get Advice, Listen & Reciprocate
Don’t go alone.
Let your advisors, mentors and support crew help.
Don’t be an island where hubris and stubbornness block solutions or support.
Help others in your world and experience the spirit of reciprocity.
Be Agile
Business owners have agency and independence.
Be agile and anticipate change.
Remember that change can be implemented at 8am tomorrow morning.
Lead
On a lesser day, remind yourself that nobody is immune from these uncertain times.
We are all facing the same challenges.
Be a Leader.
Don’t fall down.
Go down swinging.
Act.
Closing Thoughts
Absolute certainty is a mirage.
Be agile, curious, courageous and proactive in navigating your path through the fog of uncertainty.
And remember the great mantra - this too shall pass
I write blogs & videos just like this one on business, productivity and human development. If you'd like it delivered straight to your inbox head to https://darrenkbourke.com/the-fourth-moon-blog and let me know your email.