How to manage your business and increase profit in volatile times?
Leaders must do five things:
Manage your cash flow
Retain your best people (and exit the worst ones)
Retain your best customers (and exit the unprofitable ones)
Improve your profit (by removing waste)
Guard your energy (you'll need it when times get tough)
What about leadership needs to change?
The leader needs to set a good example regarding their targets and accepting the consequnces for not achieving them. The leader also needs to guarantee that the shareholders can get the right return on their investment. Profit needs to be locked in place, whatever remains is all you have to run the business.
This attitude forces the leader to take tough decisions. The leader needs to be seen by all concerned as "firm but fair" and decisive. It is better to make a decision, get it wrong, and make another decision, rather than decide to do nothing. Research shows 70% of change management initiatives fail, the key is to implement change using proven processes such as business tools and processes we provide.
Opportunities are:
Remove poor performing staff
Remove unprofitable customers
Remove waste in sales process
Remove waste in production assets
Reduce overheads
Achieve or exceed budgets
Remove inefficient suppliers
Increase average sales/customer by 20%
Improve cash collection by 20%
Other - please specify
You have less than 12 months to free up this cash. You will need all of it to fund your survival in this continued volatility. You must take action now.
Lastly, ask yourself "what barriers are there that are stopping me from making a start on a waste reduction program"? Fix whatever issues that come out of this thought process. Keep asking the question until all the barriers are dealt with and then just make a start. If you don't start within the next five days you probably won't.
If you do, increased cash flow, reduced risk, and the ability to survive to continued volatility in the market are your rewards.