Data, Disruptions and Distractions
GoFi8ure Executive Director Lisa Martin shares some business management fundamentals to encourage owners still experiencing the fallout from Covid’s disruptions.
Times have been incredibly tough for New Zealand’s small and medium businesses – there’s no doubt about it. GoFi8ure’s Lisa Martin was genuinely surprised in the weeks leading up to March 31st by the number of owners contacting her team to express their desire to close their business on that date.
They simply had nothing left in the tank. “No reserves, no energy, no money,” she recalls.
Unfortunately, flicking the switch on your business overnight is simply not possible, she points out, citing everything from payroll and contractors to supply chain issues.
“We fully understand their angst, and we take them through the steps that need to happen. But winding up a business does take several months.”
As for the number of new start-ups that traditionally aim to begin business operations on April 1st, Lisa says they were noticeably down this year as well.
“There are a lot of cautious people out there right now and that’s understandable.”
The lockdowns of the past two years have also resulted in more people moving from large metropolitan areas to outlying regions and an increasing preference for operating home-based businesses. These trends are not just for financial reasons, but for their mental health as well, says Lisa.
Confidence in the future comes through certainty, and certainty can come through greater financial security and by talking to your team, or to other business owners, and in particular someone who can mentor you.
Mentoring is something the team at GoFi8ure is very familiar with, having helped many a business owner get back on the ‘straight and narrow’ over the years. Mentoring has become very popular in recent times, and Lisa highly recommends it.
Find someone who can be your mentor and your lifeline, she suggests.
Her GoFi8ure team can either visit the client on site, or host the client at their premises, in order to take a deep dive into strategy or execution and the financial aspects of the client’s business.
DATA, DISRUPTIONS AND DISTRACTIONS
Feedback from the business coalface also reveals that businesses are drowning in the volume and veracity of data and new technology they’re exposed to in this digital age.
“That’s from the likes of their suppliers, Inland Revenue, MSD, Business.govt.nz, MBIE, software suppliers, and so on. Texts,
emails, social media, you name it,” says Lisa. “There are so many new systems out there. You have to log into this and link up with that.
“It’s all so overwhelming and stressful for people. There’re just so many disruptions and distractions.
“If you are easily distracted by the ‘here and now’, the day-to-day, you’ll struggle to look at the longer, bigger picture over the next six to 12 months, and at upcoming opportunities,” she explains.
She acknowledges that distractions can be your greatest enemy, including those time-wasting emails that enter your inbox, often during weekends, which strictly speaking should be your time-off.
So, what is the solution here?
“Ask yourself, what is your strategy? What are your objectives? Every decision you make has to link into those, otherwise it simply becomes a distraction or disruption,” says Lisa, “not a decision at all.
“As advisers, we also have to teach people that it’s OK to say ‘no’ too. So always stop and think” Some subjects may sound boring for business owners, but are vital to their business’s success. Risk analysis is one example. It’s also important to have a framework to work to, explains Lisa. So, no matter what you’re planning, it has to be structured. “You must show discipline around your people, so they know there’s certainty around your decision-making.
“We like to inject the calm and the reason, and remind people of their responsibilities. Because understanding and mitigating risk is now an absolutely essential business skill.”
WHERE TO FOCUS
The going has been particularly tough during Omicron. To keep your business on track requires attention to detail, ‘big picture’ focus and strategic thinking.
“Learn the difference between operational, tactical and strategic thinking,”
advises Lisa. “And learn how to run a strategy session yourself. Know where you want your business to be in 12 months, three years and five years’ time.”
You’ll need to set goals, set your Key Performance Indicators (KPIs), understand your business metrics (the measurements used to track progress toward performance goals), have appropriate training in place, and encourage client feedback.
“Above all, keep every business decision you make in line with the strategy that will enable you to reach your goals,” says Lisa.
Understanding the value of opportunity costs is another basic of financial management (that’s the loss of other alternatives when one alternative is chosen) and is, again, linked to making sound strategic decisions.
“This is getting all your facts, including money in the bank, sales, client contracts, and so on – then validating and verifying them, making decisions and sticking to them,” explains Lisa.
Certainly, focus on money in the bank, but also on money that’s owed to you, as well as commitments your business has, such as lease payments or rent, she says.
“Hiring people can be expensive too – know exactly what the costs associated with new hires are. Indeed, ensure you have a budget for that new employee and that they are onboard correctly. “And hire slow, fire quick.”
ESSENTIAL LEADERSHIP SKILLS
For business owners who believe they’ve mastered the financial basics, the next level is to engage governance. For larger businesses, looking at contracting in one or two directors (sourced either internally or externally) to participate in monthly or bi-monthly board meetings is recommended. “It’s time for some serious governance,” explains Lisa. “These directors will make
you accountable to your business’s strategy.
“This is the next level of confidence and competence in the leadership of the SMEs that are still surviving and thriving in New Zealand.”
In 2022, after all we’ve endured with Covid, having true confidence in the future of your business comes from mastering those essential leadership skills, says Lisa, and that includes active listening and the discipline to section up your day to focus on specific tasks – not just job-related tasks, but personal improvement tasks.
“If you’re demonstrating that you’re open to learning and enhancing your essential skills, your team will see that and use it to better structure their day.”
EYE ON THE BALL
It may seem that the worst of Covid’s disruption is behind us. “But now is not the time to take your eye off the ball,” says Lisa.
It’s also vital to look after yourself, and be mindful of your health, in order to last the distance.
Have you got enough energy and resources in reserve? Are you looking after yourself? Can you say ‘no’ appropriately, realising that you can’t do everything yourself?
There are many curveballs ahead, but perhaps one you haven’t paid enough attention to, because it seems a little ‘left-field’ and you’ve been sidetracked by so many other distractions, is cybersecurity.
“There is so much power within data, and if someone else steals your business’s data, or your core IP is eroded, then it could spell disaster.” Yet another ball to be keeping your eye on. ■