Top five advice for small businessesby
QuickBooks director of sales Nick Williams picks his top five pieces of advice given to small businesses from accountancy firms.
There are more than 360,000 accountants in the UK and since COVID-19, the business advisory services offered by accountancy firms has never been so crucial.
Small businesses across the country have been leaning on accountancy contacts to provide much-needed business advice and financial guidance to help them to weather the challenges created by the pandemic and lockdown.
In QuickBooks’s ‘Ask the Expert’ webinars, speakers from accountancy firms and senior leaders have shared practical guidance and resources to help small businesses survive the coming months. Below is a summary of the best pieces of advice given.
1. Dream, plan, do review
With Covid-19 having a serious impact on small business finances, it’s easy to be consumed by the economic effects. As accountancy firm d&t chairman Carl Reader acknowledges, “we’re often guilty in business of thinking about the money”.
But Covid-19 has also changed the way we think, act and feel. “There’s been significant heartache globally. This has changed the way that we as consumers view the world. It’s changed our priorities, what we focus on, what we want to get from life and who we want to buy things from. So, we need to make sure that our business is fit for the future when it comes to customer demand.”
“It’s changed the way that businesses deliver their services”, said Reader, specifically with most supermarkets moving to online delivery services. “It’s prime time to sit back and reflect and become a start-up again. When you’re a start-up there’s a very simple process that you need to go through. You just need to dream, plan, do review.”
2. Predicting cashflow without data
Predicting cashflow can be difficult for those businesses unable to work over lockdown and lacking in recent data. “In any cashflow forecast you’re going to have to start thinking of predictability,” said Boffix head of accounts Aaron Patrick. “You can only predict based on what you know, what your gut feeling is and what you understand from previous data.
“The only thing we can do at this point is look at the facts we’ve got. If you don’t have those facts to hand then you’re just going to have to make a really good estimate. The best thing to do is be prudent about it – think of the worst-case scenario for income and expenses. If your business can sustain those elements, then everything else is just a bonus at that point.
“What you’ve got to consider is the amount of income that you need to be able to keep sustainable and get to that break-even point. The tools that you’ve got are going to give you that opportunity”.
With the small business community brought closer together as a result of the coronavirus, Pratrick recommended reaching out to others. “You might find a similar sort of business who wouldn’t mind giving you that little bit of advice.”
3. Protecting against a second wave
With health leaders calling for an urgent review to determine whether the UK is properly prepared for the “real risk” of a second wave of coronavirus, small businesses need to consider how their finances might be affected should we revert to a stricter lockdown.
While many small businesses have pivoted to online business models, a more hybrid approach may be needed in future. Major’s Accounts managing director Eriona Bajrakurtaj recommended “a mixture of what we’ve learnt now and what we were doing before. Try to amalgamate the two going forward, whether we go into stricter lockdown or we ease completely, you’ll be able to pivot either way and the business would carry on.”
This means not completely abandoning how you operated before but maintaining some sort of online presence to protect your income against the blow of a second wave is prudent. As Bajrakurtaj notes, “really think about: how can I implement these things permanently? Is it feasible? If not, try to think of ways to make it feasible and ensure you won’t have too much of an issue going forwards if anything like this happened again.”
4. Keep pivoting
Small businesses have the ability to be agile and flexible. With the experience of pivoting now under their belt, small businesses should not be afraid to continue innovating. “In the last three months we’ve seen some amazing pivoting from our clients to some really cool entrepreneurial skills. And there are lots of new ideas, services and products all happening because of Covid-19 that might have never happened before” said JGBC managing director Johann Goree.
Goree pointed out, whilst pivoting was a means of survival, most his clients plan on continuing their new services alongside normal trade, therefore setting themselves up for long-term growth.
As a result of the success he’s witnessed, Goree suggested clients regularly review ways to pivot once the crisis has ended. “Every three months sit down, look at your business and think – what new policies can you do? What products and new services can you do to grow your business?”
5. Review processes and become as lean as possible
For small businesses looking to build a post-Covid strategy, Pearl Accountants founder Shoaib Aslam suggested clients take this time to look at their processes and ensure they are as lean and efficient as possible.
“One of the things we recommend is to make sure you invest into the right IT infrastructure – such as Customer Relation Management (CRM) tools that can integrate together. This will help put your business in a stronger and healthier position once the crisis is over” said Aslam.
With day-to-day life often getting in the way of investing time into the key aspects of running a business, he has been advising clients to get ahead of the game and use this time as an opportunity to invest in technology.
Getting the right software in place can help a business to be faster, more efficient and ultimately more productive – placing its owners in an ideal position to take advance of the upcoming recovery phase.