As we all start budgeting for 2022 how can we innovate instead of just doing what we needs to be done? Now is the time to reflect and buy yourself a metaphorical day from the business to put down day-to-day tasks and work ON the business not IN the business.
1. Update the tools of the trade: First, take a long hard look at your systems. Is your home-grown customer support portal or CRM creaking at the seams? Or did the person who customised it, leave 3 years ago? It is time to add IT infrastructure to the capital spending plans for 2022.
2. Automate: Now look at what takes you (or your team) time every week that could perhaps be automated? Investing a small amount of your IT budget could enable you to automate your processes and make life easier. Some processes that are often ignored for automation, but take up time are recruitment, HR issues, new contracts and even the Covid processes and procedures. So, take a fresh look at your business processes to see if adding a BPM (Business Process Management) tool to help increase efficiency and automate those tasks.
3. Utilisation of fixed costs: These are no longer a certainty as office space is no longer a permanent fixture and many shared resources (such as printers), have been taken home. Audit your assets and make sure they are being used in the most efficient fashion.
4. Test budget assumptions: Test budget assumptions and change them. Now is a good time to see the impact of losing a few clients – we need to prepare for the worst and hope for the best and maybe have a high, medium, and low expectation budget. This will help you be more pragmatic as you look at different scenarios and you can lay out “treats” for the high and medium.
5. Contingency planning: This has never been more important and if you can have a slush fund to support this you will be more prepared than most into 2022.
6. Cash is king: Liquidity is such a wonderful treat when clients pay on time and your accounting system doesn’t have any RED marks on the dashboard. The reality is far removed as big business can continue to squeeze the little guy with 90-day terms and worse. It’s all very well having a penalty charge for overdue invoices, but many Corporations laugh in the face of danger and our trivial threats. If you have the luxury, chose your clients wisely, but if not, try to discover the client’s billing cycles or find out if Accounts Payable likes doughnuts!
Today more than ever, businesses need to be agile and adapt to change. But at the core you need a robust, yet flexible, budget that charts the way forward and gives you a yardstick against which you can be measured.