Filip Boksa Shares steps to follow for a winner’s results even in the Covid-19 crisis
During the last few years, we have heard a lot about the crisis generated by a pandemic: the one that left, the current one, the one to come, the slowdown, the recession, the economic recovery and, when stability is foreseen; a new crisis has begun. The truth is that the periodic crises world economic system suffers, combined with globalization, increased competitiveness, increased customer demands, banking restrictions and the dynamism of the markets have made businesses go through flat periods.
Survival of companies is governed by the primitive (but still in force) “law of the fittest “, where the most winning business is the one that in an agile and intelligent way adapts to the continuous changes in the world and takes advantage of them to generate new markets for goods and services.
While some sectors have shown greater adaptability and resilience than others, we believe that companies must act quickly and decisively — and even in anticipation — to stay afloat. Without a doubt, your plans to face these difficulties are already underway, and we want to help you in this vital process for your business, no matter its size: micro, small, medium or large or if it is family or institutional.
Based on experience and with the support of specialists and business consultants, we want to offer you this practical and straightforward guide of three points to provide you with a vision of those elementary areas that you must attend to improve the capacity of your business, to do facing current economic challenges. And to take advantage of the difficulties arising from the pandemic.
The advice and recommendations that are proposed are essential for all flexible business management. Sometimes we neglect basic and simpler tasks when the focus is on growth or significant strategic issues. Now it is imperative to also focus on the essentials. During the next few months, your priority should be to implement or regain discipline and order in your company and your activities, since problems are always closely linked in both cases.
In that case, we reached out to the Founder and CEO of BookingKoala and Sassy Egg Inc., Filip Boksa. He is an expert on business management having grown his companies from the ground zero. Today, his companies are some of the top-performing servicing businesses, having a diverse customer portfolio.
Boksa remains one of the most effective entrepreneurs today; a college drop-out, a genius of his domain, and a source of inspiration for the aspiring and hungry. He shares attributes alongside the most gifted entrepreneurs today, drawing exceptional coverage from Forbes, Entrepreneur, and Inc. Magazine.
“If your processes are carried out quickly and decisively; It is possible that the changes only affect you tangentially in the worst-case scenario, since –even- they can be an opportunity for growth. Well run, structured and managed companies will find opportunities where others find uncertainty,” he adds.
This guide is designed to be implemented over a year, apply one point at a time (every month), and by the end of the year, your business will have the discipline to overcome difficulties, stay afloat and grow.
· Review the raison d’être of your company
Part of the basics reviews the documents that support your business strategy: the mission, vision and values. Remember that you raised your company’s mission as its reason for being, the vision as what you want it to be in each period, and the values as the qualities with which you will achieve it.
It is a good time to analyze how far you are from those fundamental principles that you once raised and if necessary, adapt them to the current situation. It is also essential that you aim to fulfill your strategic objectives and your company’s vision. If you do not have these points determined in your business, what do you expect? Establishing the mission, vision, and values is the first step of strategic planning; it is the first step to business discipline.
According to Boksa — what to do?
You must establish the mission, vision and values through serious and objective exercise. Remember that they are fundamental principles to dedicate adequate time to consider your partners, managers, and staff.
…and what not?
Avoid overdoing it; don’t lose the floor. Your company’s mission, vision, and values must be achievable and realistic, concrete and easily remembered. It is vital that all your staff know their importance and assumes them in carrying out the work.
· Control liquidity
“The saying holds: billing is vanity, the utility is sanity, and liquidity is reality”, shares Boksa. In difficult times it is sensible to think that money may be scarce. Your clients can lengthen the payment terms, the volume of sales tends to decrease, the profits are reduced, and your bank decides to restrict the credits. In short, liquidity can be limited. This situation is far from the market scenario seen in the near past. Many companies have not maintained tight control over liquidity for a while because they didn’t need to.
In the short and medium-term, the key is to conserve and control liquidity, and managers should pay the utmost attention to this aspect. In the same way, discipline must be maintained in personal and family cash flows, that is; do not live above your financial means to not affect your company.
What to do?
Carry out critical business analysis. It rigorously establishes short, and medium-term liquidity needs and projects expected cash flows based on realistic and reliable financial information. Suppose you can’t do it on your own, lean on advisers. You will need a profound and in-depth analysis to obtain an image that corresponds to reality. Do it equally with your personal and family liquidity needs.
To generate liquidity more quickly, negotiate the conditions with your suppliers so that the payment terms are lengthened and with your clients to be as short as possible. Focus on the main parameters, such as the difference between payment and payment days. Although it is simple, it is very effective: as long as you charge faster than you pay, you start on the right foot.
Manage your inventories as efficiently as possible: use “just in time” replenishment to keep your stock levels to a minimum and liquidate obsolete and slow-moving products. In the short term, you may have to sacrifice profits to generate liquidity and cash flows.
Although it may seem paradoxical, analyze if it is possible to increase your products’ prices and reduce the volumes of physical units sold, without damaging your profits, since this reduces the needs for working capital and, therefore, cash. Of course, this must be done with judgment and prudence, considering the elasticity of prices. If you lose too many sales, you will put your business at risk.
Compete with differentiators that add value to your products and services
What to avoid
Don’t start working for a new client without first ascertaining their ability to pay, even if you’ve struggled for months or years to get there. Circumstances may have changed.
Avoid the accumulation of portfolio or overdue payments. It is important to negotiate with the debtors’ new forms and payment terms to recover those that have been delayed.
Control your personal and family flows so that they do not spend or invest in unnecessary assets. Live below your income and only buy what you need.
Do not enter the price war because generally, everyone who competes with this strategy loses out.
· Listen to your customers
Your customers are the fuel of your company, pay attention to them. A close relationship with your client will allow you to satisfy their needs in a relevant way. They are your best advertisement. Listen to what they have to tell you that will give you an idea of what you are doing well, what you have to correct and what you can improve.
What to do?
Conduct regular surveys with your customers to determine their degree of satisfaction with the products or services you offer. Make courtesy visits or call them occasionally to check that everything is going well, it won’t take long, and it will be significant.
What to avoid
Avoid long and tedious customer satisfaction questionnaires. These must be concrete and objective to obtain only the information that is useful to you. When a client asks to see you, do not refuse, if you cannot attend him at that time, send the best of your staff and try to arrange a new meeting with him.
