Controlling the controllables

During this period of increased uncertainty, it can be easy to feel overwhelmed. A lot of that is down to control – or the lack of it as the economic climate, delays in supply chains and even extreme weather can all impact your business in a way that you cannot predict nor prepare for.

But unpredictability is part of running a business. You’ll inevitably face highs and lows but it’s how you hold the ship steady that counts. And in times like this, it’s taking command of the parts you can control that will ensure you retain a solid grasp on how your business is running.

Information remains critical
Peter Drucker famously said; “If you can’t measure it, you can’t manage it.” In today’s business world, this means tracking up-to-date information about your business operations so that you fully understand its working parts. Information – and how to use that information – is critical.

If necessary, take time to reconsider what your business does and what your short- and long--term goals are. Reassess your demand cycle and how you pay your staff. Ensure that everything is running as efficiently as possible and that there aren’t any gaps in your knowledge. With enough information in your armoury, you can be clearer on whether parts of your business may be more vulnerable to fluctuation and how you are likely to be affected by this economic cycle.

A lack of information will allow doubt to sink in, strangling your ambitions or immobilising your forward planning. There will always be an element of uncertainty in planning but remaining critical and sharp to your business objectives will help you stay in control, as well as keeping you sensitive to when your business decisions may be going off track.

Looking backwards to look forwards
In order to plan for the future, you first need to examine the past. Take financial reports; as soon as they are produced, they are out of date, but that doesn’t mean that you shouldn’t create them – they are a useful tool for learning how our businesses have coped in the past.

So, look at how your business has adapted to previous situations, examine your margins, and consider the price increases that you know are coming. Research what other business sectors are experiencing and harness all of this information to produce projections and forecasts which will feed into your short- and long-term goals.

No one can predict the future, but you can make calculated decisions about what you don’t know, based on what you do know.

A projection is a movable feast
Producing forecasts should give you confidence in your decisions, based on considering all the variables and establishing what you need to achieve to accomplish the results as projected. However, a projection needs evolve and adapt as the climate changes. You can’t carry out projection one day and then sit back and expect it to still be relevant in 12 months’ time. Monitor your forecasts and adjust them constantly; reviewing them daily is advisable, as is reprojecting monthly.

If you have a bad or good month, reproject forwards. If you know something is changing, whether it be a policy being brought in by the government or a change that your suppliers have informed you about, project that forwards again. You can build this knowledge into your goals and gain some valuable certainty.

Reach out for business advice
Holding comprehensive information about your accounts is a key tool but unless you have knowledge of other businesses, you will only have your own information to go by. This means that your figures won’t have the context of the wider industry landscape and you will struggle to know if you are on the right track.

This is where seeking the support of business advisors in the marketplace, who speak to hundreds of businesses every year, will be invaluable. These professionals understand how economic cycles work, the different quirks of each business and can input into your projections and forecasts. They can give you an idea of how other businesses are tackling shrinking margins, as well as a sense of the standard figures in your industry, which you can use as an invaluable sounding board for your forecast.

At Monahans this isn’t the first time we’ve been through challenging times and economic uncertainty. We’ve worked shoulder to shoulder with many of our clients for years, using our vast experience and knowledge to see them through these difficult times. Our door is always open to discuss how we can help you to stay in control of your business in what is an uncertain and volatile environment.

We know that the next few months are going to a worrisome time for some, if not most. If you ever need support or just a shoulder to lean on, get in touch with our expert team today https://www.monahans.co.uk/contact-us

Simon Tombs