Canadian business owners have barely put the pandemic behind them, but many are already grappling with a whole host of new challenges. These include inflation, labour shortages, supply chain challenges and impending economic uncertainty.
And here’s the kicker: The strategies you used to get through the past couple of years aren’t necessarily going to help you navigate the business climate of the next few years.
With the future looking uncertain, it’s not the time to be a follower or cling to the status quo. In my experience advising CEOs, I’ve found that the most successful tend to have a culture of continual evolution. They’re agile and able to pivot to address new challenges and opportunities. And they don’t just pivot blindly. They’re guided by informed decision-making.
How do you achieve all this in your business? I believe three strategies are key.
- Develop an agile strategic plan.
Strategic planning is essential for every company. It defines your business goals, prioritizes projects to achieve them and lays out an action plan for implementation. The planning and implementation rally your team to common objectives, getting everyone to march in the same direction.
But many business owners have no strategic plan—or if they have one, it’s sitting somewhere collecting dust. Maybe it was too rigid to adapt to changing conditions.
Whatever the issue, without a strategy, it’s pretty hard to allocate your limited time and resources in an informed way. Part of this process helps you decide what not to do, which is as important as deciding what to do. A goal without a plan is merely a wish. A move in the wrong direction can even set your business backward.
Also be sure that your plan is agile: This means holding regular implementation meetings with your team to assess progress on action items and tweak your plan as conditions change. Also do more in-depth reassessments (e.g. on a quarterly basis) to update the plan to evolving realities.
- Leverage market research.
Doing adequate market research is critical for validating your ideas. It will help you with everything from prioritizing projects to updating your business model and developing an acquisition or expansion strategy.
Yet, it’s common for businesses to use a scattershot approach to major decisions. They may choose a new market or acquisition target based on gut feel or an opportunistic contact—rather than a well-researched strategy. This often leads to wasted time and resources.
Instead, be sure your decisions have a clear business case, including a good understanding of the market, the strengths and weaknesses of your company and the competition, and best practices in other industries.
- Analyze profit margins.
It’s more important than ever to review your financial practices to make sure they serve your business adequately. This includes reviewing product profit margins and developing cash flow forecasting models to align financial plans to objectives.
Many CEOs have ambiguity around margin by product and service. They may lack adequate reporting or the acumen to understand it. Now is the time to take a closer look at your finances to become better informed so you can make good decisions for your business.
When resources are limited and the challenges are great, it’s more important than ever to be guided by well-informed decisions. We can’t be good at everything. An outside expert can help you develop a strategic plan, conduct market research or improve your financial management practices.
Canadian business owners have coped well with the challenges of the past few years. With the right planning and good information, you’ll be well positioned to cope and even thrive in the times ahead.
David Lyons is a Senior Client Partner with BDC Advisory Services. He is part of a multi-disciplinary team of industry experts that aligns clients’ business objectives with impactful, results-driven advice.