After a tumultuous 2020, Covid-19 will certainly continue to have an impact on Quebec SMEs in 2021: a slowdown in activity for many businesses, the obligation to apply strict health standards, the prioritisation of teleworking, changes in the business environment (changes in suppliers, loss of competitors), and so on.
While some companies have had to close their doors, others have come out on top. Whatever the case, in the year ahead, business owners will still have to manage the unknown and the unexpected, month after month.
In fact, this process of reflection has never been so important. Dedicating an hour of your time to your business advisor will allow you to share this process in a judicious way, to identify the best strategies, put in place the appropriate tools, see the blind spots, but also to get you to go beyond your limits, be creative, and think differently.
Your business model is at the heart of your activities. You believe in it and it is the source of your entrepreneurial spirit. However, in a context of intense change, it is vital to confirm whether your business model will ensure the survival of your company;
Is your market experiencing a new reality?
Can you continue to sell your products or services?
Would you have the opportunity to develop your offering?
Are your customers the same as before the pandemic? What about their needs?
Bref, you need to confirm that your business model will enable you to achieve a desirable level of profitability to ensure the continuity of your operations. You also need to ask yourself whether it will survive once the crisis is behind us.
In addition, it is a good idea to address the list of your suppliers of services, raw materials, equipment, etc. who have survived the pandemic and make sure you identify which ones will be able to support you effectively as your business model evolves.
What's more, your business advisor can put you in touch with various experts who can support you in specific projects. For example
In strategic planning to help you operationalise your business model
In strategic human resources management to mobilise your employees in this phase of major change
In technology systems optimisation to increase your efficiency, centralise your data or choose the best integrated management information system to meet your needs
A crisis is characterised by its surprise effect. Implementing a business continuity plan (BCP) therefore prevides the measures to be taken in an emergency situation (workplace accident, natural disaster, supply disruption, etc.). The aim of this plan is to ensure that essential functions and services are maintained, enabling you to minimise the impact on your business, your customers, your employees and the long-term future of your company.
The majority of SMEs don't have BCPs, so the health crisis has hit hard, forcing entrepreneurs to deal with one blow at a time in 'reactive' mode. Would you be prepared tomorrow morning to deal with a fire, a negative viral video about your product, or an IT problem that paralyses your operations? And if you suddenly couldn't be in charge, how would your business fare? Will your current strategies be effective when the time comes? Have you tested them?
Although all companies should keep and update annual financial forecasts, including a cash budget, many neglect this exercise and underestimate its importance with financial partners;
Without financial forecasts, it becomes difficult to predict cash flow and your financing requirements. The lack of visibility on the future is detrimental to the sound management of your business, in addition to making it complex to manage incidents, such as the loss of a major customer, major changes in supplier payment terms, delivery delays generating payment delays, etc.
A global health crisis such as we are currently experiencing generates instability in the day-to-day activities of SMEs. So forecasting proves essential. In fact, by demonstrating that you are in control of your cash flow, you will gain the confidence of your banker, or other financial partners. By providing quality information (remember also to provide your monthly financial statements on time!), you will develop a relationship based on transparency which may facilitate access to finance thanks to increased confidence from your financial partners.
What's more, if you are experiencing a "growth crisis", whether or not generated by the pandemic, forecasts can save you from cash flow problems or even from having to resort to a turnaround. In fact, when a company grows intensively without having the appropriate tools in place, all the key data ends up in the entrepreneur's head. Over time, it becomes difficult to control cash flow and have a clear vision of the short, medium and long term, affecting the bond of trust with your banker;
Your advisor can also help you navigate the various grants available to SMEs by finding the subtleties that will enable you to maximise them. You could be eligible without even knowing it!
We can help you. Contact us today.