Kia ora – please see below our notes from Downtown Tauranga’s webinar ‘The Secret to Survival – A Game Plan’. Speakers Tom Beswick (Ingham Mora) and Isis Farrelly (Weather the Storm), and moderator Sally Cooke discuss priorities for businesses in the current climate and the importance of keeping your finger on the pulse.
The Secret to Survival – A Game Plan (Downtown Tauranga)
WATCH THE WEBINAR HERE (password: B9.mN^9#)
9.30am, Thursday 16 April 2020
Speakers: Tom Beswick, Ingham Mora accountants
Isis Farrelly, cofounder of Weather the Storm
Moderator: Sally Cooke, Downtown Tauranga
Overview:
- This is a ‘getting through’ bootcamp – focusing on developing game plans around strategy and finance.
- Closing the gap between where you are now and where you want to be.
- Four out of five businesses don’t have an active plan – written, measurable, up to date and with priorities. Similar stats were reflected in a poll of those watching the webinar. An example was given of the situation if the All Blacks didn’t have a solid game plan when entering the RWC.
- Key outcomes in this difficult time are to pay the bills, to have no surprises and to have predictable sales.
- There are two types of businessperson: (1) By accident (inconsistent profit, no game plan); and (2) On purpose (grow profit, smart in any market, active game plan.
- Circle of Control
- What can you control and what can’t you control?
- You can control your costs, gross profit, sales plan, financials and cash flow, so this is what you need to concentrate on.
- You can’t control external factors such as COVID-19 and government policy, so do not spend any time in this place.
- Michael Hill, the jeweller, deliberately never mentioned the word recession during his long business career.
- First Things First
- Think of your business as a house – if your foundations aren’t stable, the whole house will fall.
- Costs: An example is Air NZ who is having to take drastic action to reduce operational expenditure. This is not about getting cheaper inflight biscuits, but big cost cutting, not looking for new shiny things and getting priorities in order. A starting point is to list your 10 biggest expenses in order of cost and put your energy into reducing these.
- Cashflow management: Money in, money out. You need to pay your bills or it’s game over. Keep track of where the money comes from and there it goes (P+L) – develop a weekly schedule of income and expenditure. If you have no cash coming in at all, make sure you know how big the issue is. Know who your creditors and debtors are and communicate with them. Potential to prioritise who you pay as well as to sell down liquid assets to improve cashflow.
- Gross profit: This is what you pay for products/services and what you sell goods/services for. Think about what you can do to increase margins, eg lift your price point.
- Sales: Once your foundations are in place, it’s sales, sales, sales, knowing that they will be built on strong foundations.
- Finger on the Pulse
- This is about being deliberate and the pulse is financial. You need to have good understanding of:
- Profit & Loss (see above)
- Cashflow forecast: Revise every week, have a deficit plan and react fast to any changes.
- Sales targets: There are only two ways you can change these: (1) Your customer count; or (2) Your customer spend per transaction. It is much harder to get new customers through the door in the current environment (and costs you), so the better thing would be to get your current customers to spend more (costs you nothing).
- Eye on the Prize
- There are lots of ideas happening now, which is great. Have a good think and then stop and prioritise what impact each idea will have on your bottom line. Then expend your efforts and resources in the areas which will provide the most value.
- Think about how much stuff you do – is it too much? Pick 10 things and focus on just one of these a day. If you focus on all of them, you will dilute the exponential impact. If you focus on just one, you will create excellence in that thing.
Closing:
- Plan – game plan
- Act – what will make the biggest difference
- Review – stop and measure the impact of what you are doing\
- Tweak the game plan and go again.
