Recognising that it is time to shake up your business is often a necessary step to protect your future, says Director Michael Farrell.
If the thought of shaking up your business fills you with dread, you are not alone! Day-to-day pressures along with the comfort of familiar routines and fear of the unknown are barriers to change in many businesses. However, at a time when economic and digital drivers are disrupting our environment, your ability to lead and manage change is very important.
So, where do you start when you need to shake up your business?
Good practice is to set aside time for strategic planning. At a minimum, you should take time out at least once a year to review your business and benchmark your performance against similar businesses in your sector.
When conducting this exercise, make sure that you have the necessary information to check that your expenses are in line with, or better, than your competitors, that your costs are under control and profitability is being maximised.
Improving the financial strength of your business is a very effective way to ensure that you are ready to cope with the impact of any necessary changes.
Effective businesses have the resources to rapidly analyse financial information and performance indicators. However, you don’t have to be a large business to benefit from good management reporting. If you do not have an in-house accounting team, real time accounting services are a good way to overcome this problem.
Depending on the outcome of your business review, there may be positive reasons to introduce change. Alternatively, there may be warning signs that you need to shake up your business. Examples of these positive and negative indicators are set out below.
Positive reasons to shake up your business processes and/or structure
• You have outgrown your current business structure.
• You want to develop additional revenue streams or enter a new market.
• You need to raise capital to fund business development.
• Your competitive environment is changing and the time is right to acquire or merge with another business.
• You want to bring in the next generation, take on a new partner or recruit to enhance your management team.
Warning signs that you need to shake up your business
• You spend most of your time ‘fire-fighting’ day-to-day crises.
• You no longer have time to keep up with industry/market trends.
• You are losing customers and/or not achieving expected results.
• You have difficulty retaining employees.
Leading and managing change
Regardless of the size of your business, your ability to lead and manage change is the key to achieving success. While not everyone is a born leader, leadership skills can be acquired. Mentoring and personal development can be helpful in this regard. Likewise, bringing external expertise into your boardroom enhances objectivity and can help you make better business decisions. Consultants can introduce up-to-date knowledge and insights that can help you develop a more robust business strategy. While internal teams have a valuable business and customer knowledge, it is often easier for external consultants to identify problems and confront obstacles such as resistance to changing the status quo.
When developing your strategy, remember to take into account the tax consequences of any planned business changes.
Update your business plan and communicate your vision clearly to your team. Check that the goals you set for yourself and your employees are aligned and monitored on an ongoing basis to ensure that everyone stays on track.
Finally, remember that change is continuous, and shaking up your business should not be seen as a once-off event. By regularly benchmarking your performance and reviewing your business strategy and plan, you will optimise your ability to keep.