See the Stormy
Weather Coming...
Every business goes through good times and bad.  Some refer to it as 'feast and famine'.  Both of which vary in severity depending and ability to see the hard times as an opportunity to adjust in order to stay on track, or to rather hide scared in the closet hoping to come out the other side with just enough intact to survive.  The latter not being the best way to weather turbulent times for any business!

If a business is going through shaky times, operational and business plans are the first place it should be turning to. These are two critical areas that have the ability to be adjusted to address the challenges brought on by internal and external influences. However, sometimes the signals that things aren't going so well are not as obvious as would be expected. Here are a few red flags you should look out for as a sign that you may need to rally the troops to find better ways to do things!

COSTS INCREASING, REVENUE DECREASING.

Don't miss the obvious signs! Costs on the
increase and revenue on the decrease is one
of the most obvious signs that your business
is in trouble.

A sign that cannot be ignored and is usually
a symptom of problems that have been
going on for a lot longer than you care to admit.  Its critical at this time to deep dive into the business financials to understand why this is happening. The financials will be able to tell you whether your cost of your sales (relating to goods or services) are climbing out of control, if overheads and expenses are increasing; or perhaps if your anticipated profit margins are being actualised or not. Once you understand where the problems are can you start to devise countermeasures to turn the situations around.

SALES? WHAT SALES?

If your sales targets seem to be on the
decline, be quick to move and find out
why it is happening. It could be a quality
control problem, a client service issue, a
distribution blockage in the logistics
or even a marketing hiccup. Once
you've managed to spot where the
problem is, you can visit the operating
parts of your business plan in order
to revise the necessary standards
of delivery to support your business
sales targets.





MISSING THE MARK OF FINANCIAL TARGETS.

At the beginning of each year your business
should be setting its month-on-month
financial targets. If these targets are getting
missed regularly, this is a sure fire sign that
there is trouble in paradise! You need to
start by revising the reasons you marked
those forecasted numbers in the first place.   
What did you assume back when you put the figures together, and what has changed since then? Based on what you find, adjust your approach to either making those figures up, or adjust your numbers if nothing can be done to solve some of the problems. 

Just make sure that you don't ignore what your management accounts are telling you. Those numbers are your friends and your reality check! 

WHY THE LONG FACE?

If there is a sense the people in your
business are not happy, move quickly to
find out why. Culture and general morale is
more critical to the success of a business
than most care to beleive. 
Whilst it's not an easy thing to measure, the
best way to find out whats affecting morale
and culture is to talk to people. Individually or in groups, speak to your staff and find out the root of the issues so that measures an be put in place to turn things around.

DELIVERY IS FALLING BEHIND.

The moment you feel that there is a problem
with delivery, jump in and understand where
the problems are. There could be a variety of
reasons why delivery is falling behind. Run a
diagnostic on your systems and processes
that allow the holes to be identified and
plugged as quickly as possible. There may
be some quick solutions found to plug holes,
however there may also be the need to look
at the entire ecosystem to identify longer
term, more sustainable solutions that effect
the ability to deliver on time, on budget, on
quality.  


CLIENTS ARE RUNNING AWAY.

Clients come and clients go. These things
happen from time to time. But if your
business is experiencing an irregular exodus
of clients to your rivals in the market, you
may need to step in to stop the leak sooner
rather and later! Understand why they are
leaving to find another partner to service
their business. 
Ask leaving clients why they are leaving.  
They can explain to you why they feel that
an alternate supplier is needed which will allow you to go back into the business to assess the need to change. Assess internal and external sources to understand the reason why they are leaving in order to slow, or stop altogether, the number of clients running out the door.  


TOO MUCH CHANGE.

Whilst adjustments to your business and
operations strategies is perfectly normal, if
both are experiencing complete overhaul,
something
is very wrong. If a business is experiencing
major change to it's original strategies ,
there needs to be considerable assessment
as to why such a major change is needed to
navigate challenging times. Sit down with
your management team to identify why the
original strategies were so far off the mark
or are not being achieved. Once the diagnostic has been run, partner with your management team again to create the necessary change to tackle the problems being faced by the business.  


Most importantly, learn from that experience. When assessing the effectiveness of any business and/ or operational strategy, as much foresight and trouble shooting possible future scenario's is necessary to avoiding needing to change strategies constantly. 

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All businesses will go through times of bad weather. Make sure you are able to see the rain coming, have an umbrella, work hard to plug holes, and make changes to the roof in order to stay dry until the rain eventually comes to an end.




Writer:
Robin Hook | Flusso Consulting | Founder