Businesses are facing huge challenges to survive the coronavirus pandemic and many tough decisions have to be made. But they also need to plan for success in the future and making the wrong decisions now could lead to disaster, according to one expert.
In order to survive the crisis so far, businesses have cut costs by furloughing staff while others have made positions redundant. But business management partner Biramis says firms should not just be looking to survive the crisis – they need to reboot themselves so they are ready for future growth.
And with help such as business interruption and bounce-back loans, Biramis believes firms should see this as an opportunity to make changes to create future wealth and scale down their operations, rather than simply making savings.
Chief executive officer Christiane Hutchinson said: “As businesses are scaling down, they also need re-modelling, as opposed to just cutting costs.
“Don’t just lock yourself into survival mode. Businesses must make their purpose to grow and create value again. They need to reboot with growth and value creation in mind.
“Many of the changes we have seen since Covid-19 will be long lasting. This is a time for opportunities to optimise and reinvent our businesses for renewed growth and prosperity.
“We must keep our eyes on the future beyond Covid-19.”
The first step is to change your mindset from focusing on immediate to survival to planning for the future. Christiane said this will encourage responsiveness rather than reactiveness and firms need to adopt a medium to long-term strategic mindset while looking after short-term needs to scale down.
Firms that simply cut their costs are left with an impaired business, deprived of its ability to compete properly and grow, creating a negative customer experience.
Christiane said: “The worst thing you can do is reduce costs associated with satisfying your customers. From a reduced cost base, by trying to achieve the previous offering, you create a perceived cheapness and lower quality. The new model has to create an offering that is perceived as good value and gives a good customer experience.”
The key is to reboot through re-modelling, even if it means scaling down for a period. A scaled-down business must be able to grow volume to satisfy the new needs of customers and clients in the severe downturn. Their needs have changed like yours, but they are still there.
It must also provide a sustainable margin and contributions towards the revised costs and present a cash and operating cycle that is as short as possible. The key is to scale down rather than shrink.
As well as helping many businesses adapt through the crisis, technology and communications can help them evolve in future.
Biramis believes businesses should attract customers through a new digital strategy and product and service innovationwhich will help grow their market share. It is vital that they talk to clients to see what their needs are and address them in the strategy.
Christiane said: “Let people know you are still there, but also let them know the steps you are taking to meet their needs and keep everyone safe.”
