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Staying Lean, Not Mean

Staying Lean, Not Mean

Businesses are facing many challenges right now as they seek to recover from the shock of the pandemic, recover as best possible and plan for rocky tides that lie ahead. However, perhaps one of the most pressing challenges for businesses post-lockdown is about being lean but not mean.

 

What am I trying to say?

 

I am talking about balancing cashflow and the affordability to resource with customer and employee satisfaction.

Many business owners have had staff on furlough and are trying to get the timing right in bringing those staff back to work, whilst others are debating how much temporary resource they might need and when.

 

How does this impact Customer Satisfaction and Employee well-being?

 

Two examples I have seen this week…

 

Customer satisfaction

I am currently going through a house purchase. Our buyer changed solicitor mid-way through the process as the firm had furloughed so many people, he couldn’t get the service he needed.

 

Employee well-being:

A client of ours was telling us about her husband who is being asked to carry the work of his department of three; to achieve this, he’s having to work twelve-hour days to keep up. The firm can then maximise their use of the furlough scheme.

In both of these examples, the firms are clearly trying their best to manage cash to preserve their future.

However, the outcome is not good for the business with the first example meaning the solicitor lost the work. In the second, the employee, who is already drained after everything we have all gone through in the last few months, due to worries about job security, is sadly expected to accept this increased workload.

 

What can you do to get it right?

 

Plan, plan, plan

Of course, no-one knows what the future holds right now and what the recovery will look like, but you still need to try. Doing so will help to estimate the optimum time at which you will need more resource. My advice; –

  1. Make your best estimate on what income will look like
  2. Assess the staffing capacity you need to service this well
  3. Understand the trigger points in advance on when you need to bring the additional resource into service customers and ensure employee well-being.

 

Consider Capacity requirements

If you have used the furlough scheme, take advantage of its flexible nature. Remember, you can bring people back on any working pattern now so assess what is right for you.

Consider: is it more efficient to bring people back for one day and get everything done for the week ahead or is a few hours per day more appropriate?

If you use any temporary or outsourced resources, talk to them. Make the situation collaborative and discuss what you need, try to be flexible to ensure they can perhaps top up with work from other sources.

 

Cashflow

Once you’ve looked at what income you might get, and the resource required then look at your cashflow.

  • What does that mean for you as a business?
  • Do you need additional funding to get you through the next few months?

 

The balancing act

 

It is very hard being a business owner right now.

We are all trying to manage cashflow as best we can in uncertain times. A little bit of planning will ensure you can look after your employees, your client and your bank balance.

Be lean but don’t be mean.

 

About Helen Fleet

 

Helen Fleet of HF Financial Strategy works as a Finance Director and guides companies in delivering their financial and business objectives. These can include cashflow planning, pricing reviews and ways to improve profitability.

Follow Helen on LinkedIn here.

 

 

Restructuring Toolkit

Restructuring Toolkit

We decided, as part of the Coming back from Covid series, to give you a quick guide to restructuring.

Whether you are just moving the chairs around the room or making people redundant, our Restructuring Toolkit should provide you a great place to make a start.

We’ve included some templates to help you along – helping you make the most out of your limited time and budget at this difficult time. We sincerely hope that it helps with this difficult time ahead.

Restructuring Toolkit - COVID19 HR Pack

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Change is Gonna Come

Change is Gonna Come

To quote the title of a famous Sam Cooke song, one of the many consequences of the lockdown is that we have all had plenty of time to think, ruminate and ponder about our lives. For us business owners, this time of reflection has extended to include our businesses.

As a result, many may well be facing the prospect of changing their business to adapt to the changing times – be it out of necessity or because you have finally had the time required to get your house and business in order and consider the future.

In short, whether we like it or not ‘A change is gonna come’.

 

Restructuring Your Business

Whether a restructure is a choice or your only option, it can feel like a pretty overwhelming task to approach alone… So, where should you begin?

Below, we share some of the common questions we get asked about restructures and provide clarity to help you on your way.

 

“Can I just ‘do it’?”

Yes, you can. However, we recommend getting a restructure plan in place first.

This doesn’t have to be anything fancy or a scary task. Just write out your rationale for doing it, the consequences it will have, the timeline for carrying it out and the process that you will follow.

Doing so will help you gather your thoughts and put some structure around it, so that you can communicate it to your staff.

“What is consultation?”

Consultation is borne out of Information and Consultation Directive, where employers are obliged to consult with employees on any aspect that will affect their employment.

Before you moan, you really should do it!

However, be sure not to confuse consultation with negotiation. Whilst you should take on board your employees’ views about the restructure, you are under no obligation to actually implement those views.

“Do I have to consult?”

Yes, because failure to consult can cost you.

An employment tribunal can award a penalty for failure to consult. And, in the case of TUPE (Transfer of Undertakings – Protection of Employment Regulations), that award is 13 week’s salary.

“How long should consultation last?”

There are no hard and fast rules if your business has less than 20 employees. However, it should be no less than a week and as much time as possible.

“Can I use Last In, First Out?”

We’re telling you now – no you can’t. We’re not sure where the LIFO philosophy came from but forget you ever heard of it.

“Does furlough cover redundancy?”

The short answer is no.

If you are looking to end furlough to make your employees redundant, seek further support or contact us.

“What is selection criteria?”

Selection criteria is the basis by which you will select employees for redundancy.

The criteria can be based on attendance, performance, disciplinary, experience and qualifications to name but a few. Some businesses choose to base this on a competitive recruitment process.

 

Helping You Restructure

We decided, as part of the Coming back from Covid series, to give you a quick guide to restructuring.

Whether you are just moving the chairs around the room or making people redundant, our Restructuring Toolkit should provide you a great place to make a start.

As we are a generous lot here at CrosseHR, we’ve also included a few templates to help you along – helping you make the most out of your limited time and budget at this difficult time.

And remember, if you need any further help with your restructure or any HR concerns, we are just a phone call away: 0330 555 139.

 

What’s included in our Restructuring Toolkit?

 

Our restructuring toolkit is free to download here. Included within it is:

  • Restructure business plan template
  • General guide to redundancy and the redundancy procedure
  • Consultation invitation letter template
  • Template for recording individual consultations
  • Letter template to inform employees they are ‘at risk’
  • Formal redundancy notice template

 

You can download it for free here.

 

Focusing on Finances for a Post-Lockdown World

Focusing on Finances for a Post-Lockdown World

Remember your swimming badges at school… My least favourite was the one where – after you had already swum multiple lengths and dived in for a brick – you still had to swim a length in your pyjamas. I remember feeling tired, my swimming stroke wasn’t particularly strong and the weight of my wet PJs made the last bit pretty tough.

I think a lot of us feel like that now, having got through the last few months and fortunate to still have a business, we now must turn our attention to making it post-lockdown. We all feel a bit beaten up by it all. That’s why I’ve decided to share a few tips to get you energized and ready to tackle the post lockdown period.

 

Growth

We are all in a growth phase now as we rebound from this period, but this is different from when you started your business and grew from nothing. Now you can use everything you have learnt from the first time you did it and grow faster and more profitably.

My two key questions to consider;-

Who you want to sell to?

Is it the same people you sold to before or do you now better understand the profile of customer you want to work with? Think about the size of customer, the sector they are in, the location or even the number of decision makers you have to deal with.

What do you want to sell?

Do you know which of your products or services are the most profitable? Can you drop services you didn’t enjoy delivering, have you pivoted during lockdown and have great new offerings to get out there?

 

Capacity

Do you know the maximum capacity you could deliver right now based on your existing cost base?

It’s important to understand this and compare it to what you are delivering and think you may be able to in the coming months.

If you realise you are currently over- capacity, then consider:

-Use of the flexible nature of the Job retention Scheme from 1 July. Understanding what staff you need now is key and knowing your trigger points in terms of sales vs capacity, so you bring people back at the right time.

-Unfortunately, you may need to make redundancies now to preserve the long-term future of your business. If based on realistic sales this is necessary, then do not take too long making this decision.

If you are under capacity because business is going better than anticipated, then think about whether you really need to employ or are you better surrounding yourself with a network of good quality freelancers. The second option puts less pressure on fixed cots during what may be a volatile time.

 

Forecast

In such an uncertain time there is no getting away from the fact you need to forecast your cash flow.

Factors to consider:

Income – So hard to really know what will happen- will recovery be U or V shaped- who knows. Start with your best guess based on what you know now.

Costs – Ensure you build back in any costs which have been reduced during this period e.g. rent reductions, other premises related costs. You may also want to build in costs to help you re-build such as advertising or marketing.

Loan repayments– any loan repayment holidays may be about to expire so ensure you have considered these.

Tax deferrals – If you deferred Vat as part of the Vat deferral scheme ensure you rebuild in repaying this before 31 March 2021.

Sensitivity – Now you have done all this look at how sensitive you are to change – if sales were 10 or 20% lower than you have forecast what impact will that have on your cashflow

Financing – Now you know your position consider if you have the right financing in place.

So deep breath folks, we made it this far. You built your business before and all of this will help you to build faster and more profitably second time round.

 

More Support

Helen Fleet of HF Financial Strategy works as a finance director and guides companies to delivering their financial and business objectives which can include cashflow planning, pricing reviews and ways to improve profitability.

Helen kindly crafted this blog as part of our Return to Work Toolkit. You can download it for free here.