Is Your Business A Zombie Business?
Go back to basics and save yourself ...
POSTED BY JONATHAN VOWLES ON 05/03/2019 @ 8:00AM
Is your business struggling? Are suppliers forever demanding payment? Are your customers slipping away? Has your cashflow become a cash drought? In short, is your business a zombie business?
If you're worried your business is becoming a zombie business then go back to basics!
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If the answer is 'yes' to any of the above, you need to act now! Don't listen to the siren voices, "Things will pick up, They always do". Oh no they won't, and oh no they don't! At least, not without decisive action from you.
"You're in a downward spiral!"
Zombie businesses tend to become stuck in a recurring downward spiral. All you think about is short-term steps to short-term survival.
"Phew! I've managed to pay that supplier, after being 100 days overdue. I don't have to worry about him any more ... at least, not till next month."
Other symptoms are easier to spot. Lack of investment in systems means you're less efficient than your competitors. Lack of investment in training means your employees are unmotivated and unhappy. You've been forced to make redundancies, resulting in you working all hours. The list is long and depressing.
"It really is a threat to physical and mental health!"
Each issue seems to adversely compound on top of every other issue. Before long, not only does the business's health suffer, but so does yours. And that is the most dangerous problem of all.
Your ability to think straight, to behave rationally, to carry through any kind of vision, the will to push forward; all these suffer. Owner burnout can result in a real threat to both your physical and mental health.
But there is good news, even at this stage. Almost always, there's a positive way out. It just needs positive, fast action from you.
"Report, analyse, act!"
Firstly, get a grip of your cash flow. Go back to the basics. Look at pricing, costing, cash collection. Check your systems and processes and analyse the customer experience. Identify the good, the bad and the ugly in your business.
Be rigorous in culling the causes of your problems and building on your strengths. And never ... never ever ... give in to that most crippling and debilitating of reasons for inaction, "but that's how we've always done it".
Let's look at these troubleshooting steps in a little more detail:
No more head-in-the-sand. Make sure you always know what's going on. Produce and analyse regular reports - financial results, marketing results, customer satisfaction results.
Look at what you spend and what you can cut.
Look at what you do; the how of what you do and the way you do it. Work out how to improve it. Then, just pick one thing to change, one thing at a time and change it ... properly!
Involve your team and ask them for their help and input. Don't be embarrassed, instead build them into the solution.
Set time aside every month to review your results and think about the one thing you are going to work on next.
Finally, and most important, ask for help. Not just from your employees, but seek outside help. Don't ask friend or family as they'll bring too much baggage to the relationship; perhaps telling you too much of what you want to hear.
Seek out a mentor. Talk to your accountant. Make sure it's someone who will sweep aside your excuses and your subjective bias! Make it someone who will help you to see beyond your own narrow horizons and help you to see the truth; the truth of your current plight, the truth of its causes and, most important of all the truth of the best way forward, for the sake of your business, your family ... and you.
"Would you like to know more?"
JVCA are business experts with a proactive consultancy service. We love nothing more than helping business owners to see that there's a way out of their difficulties. If you're worried your business is turning into a zombie business then do give me a call on 01234 752 566 or click here to ping me an email and let's see how I can help you.
Until next time ...
If you're looking for a new accountant to help grow your business, do visit www.jvca.co.uk and discover how Jonathan Vowles Chartered Accountants can help you!
I've been an accountant in and for business since 1987 and have a wide experience of consultancy, audit, accounts, taxation and wealth planning work from individuals and small businesses to multinational corporations and charities.
My eclectic interests in growing and developing business span a number of areas … and can be summarised as strategic business advice and tax saving advice.
I have worked with the Chamber of Commerce to deliver courses for people about starting up in business and have lectured about tax for a major accountancy practice and for Milton Keynes College.
I relax by reading fiction and by getting away from the office in a campervan.