If someone had told you in 2019 that within 18 months almost every economy in the world would be shut down – with most of the world’s population working from home – you might have called them crazy!
But here we are, almost 2 years later...
Sadly, it has been a distressing time for many businesses; particularly those that rely on foot traffic and tourism to survive. While the road to recovery may be tough, there is much we can take away from the experience.
Challenges are unavoidable in any business journey, and every challenge provides an opportunity to learn and grow.
With this in mind, here are 10 important lessons we can all take from the pandemic as we prepare to step into a new year…
#1 Digital is the future
Today’s consumers demand fast, efficient, and personalised experiences which are difficult to provide using traditional manual and paper-based processes.
Remote working is also near impossible to achieve without digital transformation – be it cloud storage, VoIP, or video conferencing tools.
If your business is still relying on legacy methods, 2022 is the year to examine how advancing technology (including AI) can help reduce costs, drive efficiencies, and improve staff and customer experience.
#2 Marketing must reach customers where they are
While effective marketing used to mean street signs, letterbox drops, and TV ads, today’s consumers spend more time than ever on their smartphones. This was highlighted during the pandemic when outdoor activities and event cancellations left digital as one of the only remaining avenues for marketing.
When considering your 2022 marketing strategy, make sure it includes a healthy allocation for digital spending.
#3 Cashflow is king
The pandemic certainly proved how important it is for business owners to know their numbers and budget for unknowns.
Set aside time next year to review your business cash flow fortnightly or monthly, so you always know where you stand and can be proactive if a difficult situation arises.
#4 Engage with the ATO
While the ATO was relatively lenient during COVID, this will certainly change in 2022.
Remember that the ATO is a creditor, so tax obligations should always be part of your cash flow planning. If you can’t pay tax debts as they fall due, negotiate a payment plan early on to avoid penalties or more serious action.
#5 Renegotiate payment plans
Life doesn’t always go to plan, which means sometimes payment plans need to change.
If you notice that cash flow is tight (especially with interest rates set to rise), be prepared to act. Have a chat with your lender and renegotiate loan terms before things get out of hand.
#6 Review customer payment terms
The smallest changes to business processes can have the biggest impacts – especially when every cent counts.
Next year, assess your customer payment terms to make sure you:
- require a 50% deposit
- have payment terms of no more than 30 days
- follow up overdue debts quickly
#7 Structure your business for success
The way your business is structured (i.e.: company/trust) can make a huge difference in terms of tax efficiency and asset protection.
If you’ve never had an adviser review your business structure before, make it a priority in 2022.
#8 Be an employer of choice
Australia was in the midst of a skills shortage before COVID, which has become even worse with limited movement between cities and countries.
It certainly pays to be an employer of choice, where skilled professionals choose to work with you because of the flexibility, culture, and meaningful work on offer.
Take the time to prioritise employee experience next year, and build a reputation as a place people love to work.
#9 Be agile
An agile business responds quickly to change and isn’t afraid to fail if it means finding the best way forward faster.
Look for ways to eliminate unnecessary limitations in your business – from pointless meetings to excessive paperwork, outdated policies, unnecessary bottlenecks, and so on.
#10 Think ahead
While many business owners get by without a business plan, no business is as effective as it could be without a business strategy.
In 2022, set aside a day every month or quarter to review:
- how your business is tracking
- the current landscape (including your competitors)
- risks and opportunities
This simple activity can make all the difference when a threat that you predicted is realised and you can respond with confidence.
#11 Bonus tip: Partner with an adviser you can trust
Especially during periods of uncertainty, trusted advisers are worth their weight in gold. They help you assess your situation calmly, and offer experienced guidance when you need it most.
If you haven’t partnered with a business adviser yet, add it to the top of your to-do list for 2022.
Why choose RSM?
RSM has helped thousands of small to medium businesses successfully navigate through recent events.
We provide a cost-effective, highly experienced, and holistic service – ranging from everyday bookkeeping to annual tax, business structuring, growth strategies, insolvency support, digital transformation, and so much more.
To book a free business health check, or to chat with an experienced business adviser, please contact your local RSM office.
For further information
If you require further information about the COVID-19 lockdown and grants available, please contact your local RSM adviser to find out more in relation to these measures.