A futureproof business is one that is well-positioned to succeed in the future, regardless of the challenges and changes that may come. This is a combination of mindset and preparedness. Mindset means being adaptable, innovative, and responsive to the needs of customers and the market and preparedness is building security.
Under mindset we would include:
Investing in research and development. This is essential for staying ahead of the curve and developing new products and services that meet the needs of customers.
Emphasizing innovation. This means being open to new ideas and willing to take risks. Businesses that are not innovative are more likely to be left behind by their competitors.
Being responsive to customer needs. This means listening to what customers want and need, and then developing products and services that meet those needs. Businesses that are not customer-focused are more likely to lose out to their competitors.
Being adaptable to change. The world is constantly changing, and businesses need to be able to adapt to those changes in order to survive. This means being willing to change business models, strategies, and even products and services as needed.
Building a strong team. A strong team is essential for any business, but it is especially important for businesses that want to be futureproof. A strong team is one that is made up of talented and dedicated individuals who are committed to the success of the business.
Build a network. Having a strong network of friends, family, and colleagues can be invaluable in times of need. Referrers, cheerleaders, supporters etc. A mentor and advisors. Make an effort to connect with people from different walks of life, and build relationships that you can rely on.
Stay informed. The more you know about the world around you, the better prepared you will be for whatever comes your way. Read newspapers, magazines, and blogs, and watch the news. Talk to people from different walks of life, and learn about their experiences.
Secondly, preparedness to build security. There are many reasons why it is important for a future proof business to retain cash and build reserves. Here are a few of the most important:
To cover unexpected expenses. No business is immune to unexpected expenses, such as natural disasters, equipment failures, or lawsuits. Having a cash reserve on hand can help businesses cover these expenses without having to borrow money or dip into their operating budget.
To take advantage of opportunities. When a good opportunity comes along, businesses need to be able to act quickly. Having a cash reserve on hand can give businesses the financial flexibility they need to take advantage of these opportunities, even if they are not immediately profitable.
To weather economic downturns. Economic downturns can have a devastating impact on businesses, especially small businesses. Having a cash reserve on hand can help businesses weather these downturns and stay afloat until the economy recovers.
To improve creditworthiness. Banks and other lenders are more likely to lend money to businesses that have a strong financial history and a healthy cash reserve. Having a cash reserve can help businesses improve their creditworthiness, which can make it easier to get financing when they need it.
By retaining cash and building reserves, businesses can improve their financial security and position themselves for long-term success.
Obviously as accountants we have some tips for businesses that want to retain cash and build reserves:
Create a budget and stick to it. One of the best ways to retain cash is to create a budget and stick to it. This means tracking your income and expenses, and making sure that you are not spending more money than you are bringing in.
Pay down debt. The more debt you have, the less cash you will have on hand. Make a plan to pay down your debt as quickly as possible.
Invest in your business. When you invest in your business, you are essentially investing in your future. This could mean investing in new equipment, marketing, or training for your employees.
Save for unexpected expenses. Set aside some money each month to cover unexpected expenses. This could be a rainy day fund, or a separate account for unexpected expenses.
Don’t be afraid to ask for help. If you are struggling to retain cash or build reserves, don’t be afraid to ask for help. Wood and Disney, Chartered Accountants and Business Growth Advisors can help you create a plan to improve your financial situation today in anticipation of the uncertainties which will inevitably come your way.
