Previous Articles:
- The Right CPA for You and Your Business
- Five Reminders to Start the Year
- How is Your Bank Lending?
- The Business Case – Are You Leveraging It?
- Is It Time to Invest in New People?
- Storytelling – How Does the Story of Your Business Read?
- What Rising Interest Rates Mean to You…and Your Neighbor
- Netflix Password Sharing and Your Business
- Mind the Gap
- Silicon Valley Bank Failure and the Impact on the Small Business Community
- How Well are You Converting to Cash?
- Tracking Performance in the New Year
- Taxpayer Beware – The Employee Retention Credit
- Paying More Attention to Year End
- Do Your Financials Match Your Business Narrative?
- Be Prepared for Tough Questions, and Ask Them Yourself
- Why the Budget Matters
- The Fed, The S&P 500, and Your Business
- Do You Know Your Real Margins?
- Critical Headlines to Watch
- Life after Budget
- Small Business Implications to the Tragedy in Ukraine
- Investing in Your Business – Is the Picture Clear?
- We Have More Cash Than Expected – Now What?
- It’s Time to Talk Tax, Well Before Tax Day
- The Supply Chain Dilemma and What to Do Next
- Is your business sale ready today? You should be and here’s why.
- What does your lender really think of you? You should know, and here’s how to find out.
- What If?
- Finding the “Right” Growth
- Budgeting Process Best Practices
- PPP Forgiveness – What Is a Business To Do?
- Two Details Your Lender Is Asking About, and You Should Too
- Practical Tips for Managing the PPP
- Navigating through a Crisis – Immediate Steps to Take
- Accounting vs. Finance – Both Matter
- The Year End Financial Checklist
- ERP Systems Part II – Successful Implementations
- Three Keys to Evaluating a New ERP System
- 5 Steps to Manage Cash Flow
- KPIs & Your Business – A Management Must-Have
- 6 Keys to an Effective Budget
- Cash is King, Except When It Isn’t
- C-Suite Hat Juggling: Is this Normal?
- Financial Statements – Why They Matter
- How to Effectively Communicate Your Company’s Financials with External Stakeholders
The Most Important Three Feet Businesses Face
One of my favorite quotes is from Royal Robbins, a pioneer of American rock climbing, who said, “When it’s been a long day of climbing, and I feel like I can’t go any farther, I concentrate on the next three feet. And then the next three feet; and then the next three feet. Pretty soon, I’m at the top.”
Conditions in the marketplace are extremely challenging. For many companies and their leadership teams, it feels like they are out on a ledge, on a mountain too tall to climb, with visibility so bad, one has no idea which route to take.
Things are changing so rapidly in the business landscape, yet it seems every day brings more questions than answers. Right now, we are all asking, “What will re-opening look like? What will customers do? How and when do we re-hire? When will the economy rebound?” We just do not know the answers yet.
In the face of that uncertainty, management teams can move their businesses forward by focusing on a few key things:
1. Focus on what you can control.
This is first and foremost. There are a lot of things out of our control, but we can control movement, momentum, and action forward just like Royal Robbins. What do the next three feet look like for your organization?
2. Create and monitor a “picture” of your customer.
They have almost certainly changed. Assess their current state and carefully watch for changes over time. How healthy are they? Can they buy? Will they buy – just because you have a great deal to offer perhaps, will the customer take it at any price? How do you best reach them with what you have to offer?
3. Map out the desired journey, with detours.
There is no better time to have a clear plan, even though obstacles seem to constantly appear. No different than scaling that mountain when bad weather arises, you might have to take another route up, you might have to take an intentional pause, or possibly even go back down a bit. The key is planning ahead of time on the available options – have contingency plans throughout. It is highly unlikely the route will go exactly according to Plan A, but thinking ahead of time of possible options will make it much easier to nimbly shift when the storm comes, and also much easier for the team to follow.
4. Have a cash flow plan.
An essential piece of that plan is cash flow. It needs to be on paper and go out at least the next 2 to 3 months. The goal is not to get it perfect; it is more of a compass to help with direction in making decisions. It will change frequently, and it needs to be reviewed as much as multiple times per week. When is cash likely to come in? (Be very conservative). Lay out the key buckets of expenses in the business. And make sure there is an understanding of any deferred expenses such as rent, loan payments, etc., that may have accumulated during the last few months. A great best practice is to compare forecast to actual – this can really help fine tune the process.
5. Seek guidance from key strategic partners.
Having the right banker, CPA, lawyer and other strategic resources has arguably never been so important. They can provide you with key insight and resources, can help you strengthen your planning, and provide context on the broader market. You should not be alone in these uncertain times, and these partners are there to help you navigate. If they are not of help right now, find ones that will be. You will need them to reach the summit.
The journey is not going to be easy, but the opportunities will be abundant as the market rebounds. Even in this time of uncertainty, companies can take proactive steps to not only survive, but to thrive as well, even if just three feet at a time.