The last few years have upended so much of how we live and work. For some of us, those were permanent changes. For others, much has returned to a pre-pandemic version. For business owners, it is important to reflect on both realities. To meet your customers where they are now, and to understand what changes (or not) need to be made to your own business, you should do a reset on your operations. Now is a good time to look at how you run your company and how to build your future.
Here are three ways to reset on your business and prepare for the future:
How do you stack up? Before the pandemic, most business owners could (hopefully) articulate where they were in the competitive landscape. They understood who the major players were within their industry, and how they matched up in that space. For some companies, perhaps none of that has changed. For others, the shifts in the economy might have influenced market share, changed the makeup of their customer base, or created space for new competitors. All of this impacts your strategy for the future. For example, if more of your existing clients are online now, you may need to reconsider future investment in brick-and-mortar retail. Did you see a surge of demand in a different product or service? Maybe you need to reconsider your marketing strategy so you can retain this new revenue stream. On the other hand, if you lost business over the last few years, then understanding how to recoup those customers or gain new ones is likely your primary focus. Maybe you are also looking at how to cuts costs, such as taking advantage of a depressed market to renegotiate rent or prices with suppliers. What is important now is to review all of this through a longer-term lens, instead of the reactionary, moment-to-moment adjustments the pandemic required.
How to make sense of your dollars. Often companies can look at their historical books to help forecast their future earnings. But the last few years have created an extremely unpredictable business environment. Working with your financial partners, whether an internal team or external advisors, is more important than ever before. To get a comprehensive understanding of your financial health you will have to consider both past performance that is an outlier (decreases in production due to pandemic-related shutdowns) as well as shifts in the market that are likely to endure: for example, energy prices increased nearly 18% in 2022, and it is unlikely to return to 2019 rates. For some employers, higher salaries are a lasting reality of worker shortages. For others, talent has been attracted to stet lower-cost-of-living locations. Some companies will need to spend more on equipment and supplies, while others have implemented increased worker safety measures. Interest rates on lending, or other costs of financing the business also must be considered. You might even consider getting a current valuation of your business. Even if you have no interest in selling your company or acquiring new financing, a valuation is one good way to get a sense of whether (and how much) market conditions have changed. But all this analysis must result in a working version of what your future business looks like, in a way that allows you to plan and strategize.
Changes to the legal landscape. You may need to see if you have new legal considerations as well. Have any new regulations been passed recently that impact your business? Are you now operating in new ways that create different legal risks. Are you having supply chain issues? Consider having a lawyer review your standard vendor agreements or customer terms and conditions for any appropriate new provisions to protect you against changing risks. Are you now using a lot of “gig workers”? Freelancers (independent contractors) have become much more popular in recent years but companies who use them need to be sure they qualify for non-employee (referred to as 1099) status. (Hint: if they work exclusively for you, they might not be.) And if you do have traditional employees, be sure you are complying with laws regarding sick leave and vacation days – these vary by state to state, and much has changed since the pandemic.
The business environment of the last few years has shifted enormously. A reset on your business helps you understand how much.
Very few companies have gone unimpacted by the pandemic, shifting employee expectations (and locations), the war in Ukraine and social changes. While it was essential to react as quickly as possible to each of these changes in the moment, now is time to revisit where you are for the medium- to long-term. You cannot see the future, but you can try to prepare for it.