As business insolvencies continue to rise, Australian businesses need to improve their capability to survive ongoing tough business conditions – with this in mind two organisations at the coalface of business survival have joined forces to create a Guide to Building a Resilient Business.
Business turnaround specialists Vantage Performance and leading data and technology bureau CreditorWatch have created the guide as a free downloadable resource.
Vantage Performance CEO Michael Fingland said ASIC data out this week reveals 5,643 companies have already entered external administration or had a controller appointed for the first time in the 2023-24 financial year, an increase of more than 1,400 compared to the same period in 2022-23.
“The goal is for businesses to put resiliency plans in place that will help reduce Australia’s insolvency numbers,” Mr Fingland said.
“This is crucial in 2024, with cost-of-living hurting businesses across all sectors, while discretionary retail is in dire straits, and we’re seeing a lot of distress in the agricultural sector, construction and manufacturing with more tough times to come.”
At the same time, CreditorWatch’s Business Risk Index data shows the average value of B2B invoices to be at record lows.
“This has a ripple effect throughout the supply chain, affecting businesses in multiple industries and of all sizes. We are also seeing trade payment defaults trend upward, with a 55 per cent year-on-year increase,” CreditorWatch CEO Patrick Coghlan said.
“We’re grateful to Vantage Performance for creating the guide which gives Australian business owners and leaders valuable insight into how to strengthen their business and take the proactive measures now to weather the storm and be in a much stronger position when conditions eventually improve,” he said.
The guide shares insights Vantage has learned from working to turn around and strengthen hundreds of Australian businesses over the past two decades.
The guide is a summarised version of Vantage’s unique Fast-Track program, which outlines eight pillars and 50 critical management tools, habits, systems and processes that all long-term highly successful businesses have in common.
It covers creating a strategy, finding purpose, habits for success, effective sales, putting in place the right business intelligence, working capital management, leadership and culture and finally governance and accountability.
“It’s not brain surgery, but in the day-to-day busy-ness of growing and surviving in business, it takes discipline to continuously improve,” Mr Fingland said.
“Even if businesses focus on one of the eight actions at a time, rather than taking them all on, they are taking a step in the right direction towards overall performance and sustainability.”
Quick tips to set up for long-term business success
Develop a strategy – this should be distilled to a one-page strategic plan based around what you are best at.
Find your why – no business has long-term resilience without being able to clearly answer this question
Build habits for success – promote quick, focused and regular communication among team members through daily and weekly huddles and set 100-day goals to create quick wins
Sales effectiveness – identify your ideal customer, create a sales pipeline tracker and measure customer satisfaction regularly
Business intelligence – make sure your decisions are informed by reliable data, so implement financial and operation dashboards and review them often
Working capital management – a 13-week cashflow forecast and 3-way integrated forecast is a must, as is understanding your working capital days
Leadership and culture – to survive tough business conditions, you must already have in place a culture where staff are aligned with your Why. If they are, they will go the extra mile for your business
Governance and accountability – structured monthly catchups are critical to review strategy and make adjustments. External board advisors or non-executive directors can provide much needed independent thought and rigour.
Free resources for business owners and leaders:
Guide to Building a Resilient Business by Vantage Performance and CreditorWatch
Vantage Resilience Index – Business leaders can complete 50 yes/no questions in less than 10 minutes (with no financial data disclosed) and access a VRI dashboard that shows their business strengths and weaknesses and benchmarks them against traits that all highly successful highly profitable enterprises have in common. The VRI tool is already being used by hundreds of executives and financiers to identify initiatives that will make their businesses (or the businesses they finance) more resilient and more profitable.
CreditorWatch webinar featuring Michael Fingland’s resilience guidance is available for viewing.
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Dynamic Business – https://dynamicbusiness.com/topics/small-business-resources/resilience-guide-for-businesses-deal-with-rising-insolvencies.html