Happy New Year Everyone.
I trust that you’ve had a good Christmas and New Year and are now looking at diving back in.
… Maybe you’re looking at developing some new goals for 2019,
… Or maybe you’re still looking at what you’d like to achieve
… Or re-vitalising those important goals and ambitions that just didn’t work out in 2018.
Whatever the case may be, it’s worth exploring some of the failures of last year, and deciding what you can do to overcome this in 2019.
Over the last year we’ve seen a few more big companies go into administration.
- Toys R Us
So, let’s examine these cases and what you might be able to do as a Small Business to avoid disaster.
Toys R Us
3,000 UK jobs at risk
Facing a £15m tax bill
Sales are down
5,000 jobs at risk
£6m operating loss in the year to March 2017
Heavy Competition and a change in shopping habits
Small profit margins
2,000 jobs at risk
Second time going into administration in 6 years
Made a pre-tax loss of nearly £8.8m in the year to January 2017
Competitions and poor seasonal sales
Get on top off your own cashflow
Let me ask you two questions, that are crucial to the well-being of your business.
- Have you become complacent – happy for you business to ‘see itself through’ on your current customer list?
- What level of service is your business offering to its Customers?
Why these questions in particular?
Well, looking at the above – what rings true in each and every scenario, is the fact that they all cite “tough trading conditions.”
Well established, one time industry leaders that have now fallen by the wayside to others who are finding more creative initiatives to overcome the competition.
Why, and what has gone so wrong that these businesses are no longer considered justifiable?
… Is it too much ambition from the word go?
… From the jump of mankind growing at an alarming pace?
… Or not taking into account the necessary precautions in the first place?
Going back to basics, and as your Business Coach is likely to tell you, it’s not only the SWOT Analysis that we should thrive on here.
Another crucial test that we should carry out, is to add in the PEST(LE) test too.
This is what’s required from the future of Accounting Standards, and it will become the benchmark for many businesses to be measured upon in the not too distant future.
Gone are the days, where you could take a specific point in time and measure the success of a particular business.
Nowadays success is based not only on your individual business strengths and weaknesses, but also on the technological and social media tour de force out there.
You have to get noticed on social media, for instance. Without having this footprint, then you are virtually invisible.
Face to Face is great, and it always will be, but many of our Customers look to social media to show them who they are doing business with.
In terms of tackling tough business conditions, it could be that other competitors are offering a better service at a fraction off the cost.
Not employing their own drivers, but self-employed ones instead, offering rates at a quarter of the price.
But … not giving the time of the day to staff members, means that customer service is likely to suffer, causing a rupture in the end goal.
It could be politically linked, e.g. the cost to run their fleet, together with other industry players who are technologically better placed in dealing with Customer’s needs.
Or cashflow may be the issue that leads to placing the company into Administration.
Maybe we can all take note from these disasters and learn from their mistakes.
And, if necessary, seek the right help from other professionals out there who are better placed to foresee any pitfalls before they occur.