Expert Panelists are handpicked and invited to contribute because of their knowledge and valuable insight within the areas of Business, Mindset, Leadership, Lifestyle, and Sustainability. Members of The Brainz Magazine community of experts will share their best tips, advice, ideas, and hacks on different topics.
Expert Panelists
1. Budget And Invest Wisely
All entrepreneurs have great ideas when starting a business. However, many studies show that most businesses fail within the first five years. Here are two tips to get you started on the right foot and keep your business thriving when others are failing:
When starting a business, it is imperative to create a realistic budget and stick to it. It is equally important to hire a professional accountant to help you with your budget and hold you accountable for yearly business financial statements.
Don't make high-risk investments with your business. It is important to invest in your business, but many businesses spend money they don't have. It is also important to keep an emergency reserve when getting started. Studies show that most people only have a reserve that lasts only two or three months. Plan to save at least six months of reserve capital in your business. Invest wisely in your business with your needs and be patient on the return.
2. Pivot To Prosper
In the realm of business, stability often hinges on adaptability. One overlooked aspect of financial preparedness is having a flexible business plan capable of pivoting with the ever-changing tides of the market. This agility allows organizations to respond proactively to unexpected setbacks rather than reactively scrambling for solutions. Fostering an "evergreen" mindset not only fortifies your financial foundation but also future-proofs your organization, ensuring its sustainability and success in the long run. This is a crucial strategy for any organization seeking to not just survive but thrive amid uncertainties.
3. Prepare For The Unpredictable
It's human nature to think that things will go along as they always have, but they don't. In addition, black swan events periodically occur that defy expectations. Yet there are things you can do, including developing a plan for contingencies like losing a major client, losing a key employee to another firm, illness or death, and developing financial reserves during good times to give you a cushion to right the ship during difficult times. You may not be able to anticipate every contingency (like pandemic or a war); however, your plans may be adaptable for some of those events, too.
4. Bulletproof Your Business Finances
One of the best ways to protect your business from unexpected financial setbacks is to plan ahead. Developing a comprehensive budget and financial plan can help you anticipate potential problems and create strategies for dealing with them. This includes setting aside funds for emergency situations, such as an unexpected drop in sales or an increase in expenses. Additionally, it’s important to have a good understanding of your cash flow so you know when you need to make adjustments. It’s also wise to create a risk management plan that outlines steps for responding quickly and effectively to any unexpected issues that may arise. This should include procedures for assessing the situation, developing solutions, and implementing those solutions in a timely manner. Regularly monitoring your finances can also help you stay on top of any potential problems before they become too serious. Finally, having access to adequate capital is essential for protecting your business against setbacks.
5. Expand Your Revenue Horizon
Diversify your revenue streams. Many small businesses settle to be good, not great. Once they find a consistent and fruitful income stream, they rely on that interest stream and don't have the energy to look for additional ones. As we have seen during the pandemic, no single industry will always prosper. Unexpected circumstances can strike a company and industry at any time, regardless of how good the product, service or customer relationship is. That is why companies should constantly look at the industry and the market, including different stakeholders, and consider how they can improve, become more sustainable and who else they can target.
6. Align People, Processes And Technology
Organisational resilience is key to ensuring survival through the adversity of the macro-environmental and new technology landscape. Companies can create resilience internally by taking time to review their systems processes and people alignment and shine a light on where there is disharmony. If the technology is not supporting the go-to market, companies will find setbacks harder to manage, and block revenue flow.
7. Plan And Achieve Your Vision
Business is all about planning, managing your risk, innovation, and your goals and mission. Financial risk is inherent to any business. One needs to constantly plan for unexpected setbacks and prepare for them. It's like insurance! Visionary leadership, critical evaluation of market risks, leverage, cash inflow and outflow, a business plan with realistic targets, and adaptability are essential skills in our ever-changing world.
Ketan Kulkarni, SavvyPhysician
8. Harness The 'What If?' Perspective
List all the potential adverse events that could harm your business and have financial setbacks. Obvious ones include loss of customer, delay in production or delivery, stock loss, warehouse damage… And what about the most unexpected ones? A pandemic outbreak, a military or economic war for instance. All of those can harm your business. It is, therefore, your role to assess their risk mitigation: insurance, new business model, new supply chain flow, and backup plan A, B, C. In doing so, you will make the unknown become known. This is one of the golden rules of crisis management.
