How to build business resilience and manage risk

The cleaning industry, much like many others, faced its share of challenges during the pandemic. However, it proved to the world its importance in keeping everyone safe and its mettle by continuing to trade profitably even amidst the storm.

As we step into the middle of 2023, the economic landscape has evolved, presenting new hurdles such as rising costs and reduced consumer spending.

To remain successful and thrive, businesses in the cleaning industry need to prioritise resilience.

In this article, we will explore the importance of business resilience and share insights on how successful businesses navigate economic uncertainty and build resilience.

What sets better performing businesses apart?

In uncertain times, the most successful businesses stand out due to their realistic approach and ability to adapt. They acknowledge the prevailing conditions, identify key drivers in their industry, and act swiftly and decisively.

No matter the industry or financial strength, the key is to face the facts head-on and make informed decisions. Opportunities can arise amidst chaos, and prepared businesses are best positioned to seize them. That’s why it is important to…

  1. Understand the trading conditions

Business owners that keep their ears to the ground and stay across the changing conditions are generally better placed. The one’s that do well in this environment continue to monitor where they are in the business and economic cycle, learn from their peers and get advice.

At this moment in time, they know that whilst there is some indication that inflation is stabilising, future cost pressures remain uncertain. This uncertainty has resulted in a decline in spending in some areas of the economy and we’ve seen more clients report incidences of theft of both physical equipment and of information in recent times.

In these conditions, successful businesses know that they need to adopt more calculated, informed, and timely decision-making strategies to stay on top of the changing conditions.

  • Think long-term

The foundation of resilience lies in thinking long-term. This means having a clear vision, mission, and set of values. Businesses must make their vision more profound than merely providing products or services. For instance, cleaners protect people and maintain safety, they don’t just wipe down surfaces. By instilling pride and purpose in employees and communicating your long-term objectives, businesses create a culture of resilience.

Thinking long-term does not mean that if something isn’t working that you should hold on to it, it means focussing on your objectives. Sometimes you do need to cut your losses when it comes to a strategy that is not working – doing nothing is still a decision. So be honest with your business performance and don’t be afraid to pivot your strategy when necessary. It can be painful, especially if you have invested a lot into a strategy, but the first thing you should do when you find yourself in a hole… is to stop digging.

  • Make cashflow a priority

Cash flow management is critical for business survival. Start by understanding fixed costs and potential changes for the coming year. Aligning your business strategy with cash flow forecasts can help anticipate challenges. Create a financial forecast to gain insights into potential cash flow hurdles and seek advice from external advisors to refine your strategy. Regularly monitor and manage your cash flow plan to stay proactive in dealing with uncertainties.

  • Stay on top of taxes

Many of the government stimulus measures that business benefited from over the last few years have now ended.

One of the last to finish was the temporary full expensing measures, which allowed most businesses to write off 100 per cent of their equipment purchases. Now that this is finished, many businesses might find that they have a higher tax burden than in previous years. If this has not been planned for, then this can be very damaging to a businesses cashflow.

Those businesses that outperform in uncertain economic environments understand the impact that these changes in tax legislation have on their businesses. They take steps to ensure they are across these changes and work with advisors that are across all the other available tax incentives.

  • Nurture business culture

Don’t forget that your people are also feeling the pinch. The cost of living is going up and this can put significant strain of your people and their families.

Those businesses that perform well know that a good culture is an asset. People stay with businesses they like working for, even when things are tough.

Don’t allow your culture to be another reason that your employees look elsewhere. Nurture those rituals that reflect the company’s values and involve employees to help foster a sense of belonging and security no matter what the environment.

  •  Ask the right questions

In an ever-changing landscape, those business owners that succeed also tend to consistently ask the right questions and seek out answers. Including:

  • How are our clients’ needs changing during this period?
  • What sets us apart from our competitors?
  • Have we prepared for worst-case scenarios?
  • What risks are we not prepared for?
  • Can we optimize operational efficiencies?
  • Are there any opportunities within the uncertainty?
  • Do we need external assistance to bolster our efforts or protect against risk?

The cleaning industry has demonstrated incredible resilience in the face of adversity during the covid years.

As the economic landscape continues to shift, building business resilience is more important than ever. By understanding the trading conditions, making informed decisions based on what works for other business, and managing cash flow effectively, businesses can steer through uncertain times and position themselves for long-term success.

Cultivating a strong culture focused on the long-term will create a united and strong organization. During uncertain waters, resilience becomes the lifeline that enables businesses to sail through and thrive.

Andrew Ash is director – business advisory, HLB Mann Judd. Andrew will be presenting a session at the ISSA Cleaning & Hygiene on how to futureproof your business.

This article first appeared in the September/October issue of INCLEAN magazine. Read the original article here.

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