September 2022 Guest Post — Angela Randolph, CPA explains how to: “Build a Sustainable Business During Uncertain Times”

By Angela Randolph, CPA, MBA, CEO, Stellar Ledger

In times of uncertainty and challenging situations, what are the best ways to weather the storm? It may seem complicated, but from my experience as a CPA and CEO, I know it’s possible to thrive and not just survive during various business cycles. Below, please find traits and strategies of resilient businesses that prove critical in building a successful and scalable business.

Purpose: Knowing your “why” and the true purpose of your business will help you maintain momentum. There will be days when your level of enthusiasm or energy will fluctuate, but focus on why you started the business, and what value and contribution you want to give to the world, then you will have longevity.

Plan: Setting S.M.A.R.T. goals and being intentional with your business can help you stay ahead of the curve. You want to create a plan of action in crucial areas of your business, so you are not caught off guard by the external environment, competition, or market fluctuations. The acronym is specific, measurable, achievable, relevant, and time-bound. When planning your course of action in challenging environments, it’s essential to get a crystal-clear understanding of the financial position of your business– this means updating your financial records and keeping them in order.

Knowing things such as your cash position and assets that can be sold quickly will go a long way in helping you make informed business decisions. Good records build a solid foundation for a successful business. They’re also important when applying for government grants. According to a survey of the Federal Reserve Board of Governors, and Senior Loan Officers, the demand for small business loans is gradually increasing while banks slowly tighten supply.  If you know now that you’ll need funding for expansion in the future, then position your business for available financing instead of when you need it.

People: Small businesses have struggled with finding new employees. According to the U.S. Census Bureau, which tracks small business hiring needs, the need for new workers has increased since August 2020.

The demand for labor has increased to over 40% at the end of March 2022. Be sure to define the critical roles needed in your organization. Develop job descriptions and standard operating procedures before hiring staff. Hiring mistakes can cost you money and setbacks in your business, so this process should be done carefully when considering candidates.

It’s very important to have the right people on board because it’s crucial to the business’s success.

Profits and Cash Flow: If you are in business and not making a profit, that’s a sure sign that adjustments are needed. You’ll want to examine the financial health of your business. The goal of every for-profit business should be to maximize the bottom line. Tracking key performance indicators (KPIs) for your finances enables you to identify areas that need improvement and keep you on target.

You will know how your business is doing by looking at key financial figures. You can see fundamental factors such as your business’s liquidity and solvency, which will help you decide on the best steps forward as you deal with the crisis and the aftermath.

Businesses across the world are facing cash flow problems now. You are certainly not alone. However, the key here is not to let the problem worsen. Preparing a cash flow forecast should give you some forewarning before issues arise and allow you to address them early on. You can also take the following measures to boost your cash flow:

  • Identifying the demand for your products or services, so you’ll know where to focus and where you can reduce product orders.
  • Cutting back on unnecessary expenses.
  • Urging your customers to pay you, negotiating on a payment term that will work for both of you.
  • Seeking vendor payment extensions or debt restructuring.
  • Invoicing as soon as you deliver the product or service.
  • Seeking external investors or lenders.
  • Taking advantage of financial support from your government.

Pivot: Flexibility is required in business, especially in today’s global economy. Don’t be afraid to change directions when necessary. Be ready to adapt and embrace unchartered territories. Ask for help when you need it. Seek guidance and advice from trusted business advisors and other experts.

The bottom line: As I promised at the start of this article, it’s possible to build a sustainable business and for established ones to thrive, not just survive in turbulent times. The financial tips and business strategies shared here will help minimize risks to your business. If you need more guidance, reach out for help in developing a plan to weather uncertain times while saving you time and money.

About Angela Randolph, CPA, MBA, CEO, Stellar Ledger: Stellar Ledgers® is a virtual firm partnering with small businesses, providing financial accounting, consulting, coaching, and training services. We serve as trusted advisors removing the stress around managing the business finances so CEOs can focus on growth and scalability. Click here to learn more: StellarLedgers.com.