Future proofing your business: Is it even possible?
If we asked you five years ago where you’d be in 2022, would you have predicted where you are today?
Even before the pandemic, many businesses felt the future was always slightly out of reach – no matter how much income was generated, jobs booked, or hours worked. Now? The lingering economic impacts of the pandemic has many of us asking: can you really ever future proof a business?
While no amount of planning can prepare you for all the ups and downs of business, there is a way to build business resilience and wealth so you’re ready for anything. And the insight you need to get there starts in an often overlooked place: your finances.
Don’t believe us? John Pititto shares how your financial data is the key to future proofing your business and active steps you can take to build business resilience.
What does future proofing involve?
For those that might just be thinking “future proofing” is just business jargon, let’s start at the beginning.
Future proofing isn’t a new concept or exclusive to the business world. Whether future proofing a building, software or a business, future proofing focuses on what could happen, how likely (and serious) the impact could be, and what those impacts could cost.
While the application and strategic steps vary from industry to industry, the principles of future proofing have the same focus: to minimise risks, their impacts, and maximise value.
For example, future proofing principles for building design focus on creating a design that minimises decay, stimulates flexibility and adaptability, can withstand potential disasters, and puts plans in place for future changes.
While not dealing with a physical design, future proofing your business focuses on similar principles. It introduces strategic steps and preventative measures to create a sustainable business that can adapt to (and absorb) change with minimal impact, withstand disaster scenarios, and meet future demands.
4 tips to build business resilience
While future proofing is not a guarantee, there are key steps you can take to minimise business risks (and the impact of change) and build a more sustainable, resilient business. In turn, helping you future proof against worse case scenarios, stimulate growth, and reach your future goals.
The result? More time, money and resources that you can spend working on your business (not just in it).
Assess what’s working (and what’s not)
The fact is, you can’t keep doing the same thing and expect a different result. That’s why it’s essential to start by assessing where your business is today, what’s working and what’s not.
This step isn’t about highlighting points of failure but rather looking for potential business leaks impacting your future goals and growth.
Think of it this way: A ship with lots of holes will continue to sink unless you plug the holes, no matter the size of the bucket you use. If you ignore the gaps, no amount of time, money or resources will stop you sinking. You need to identify and plug those gaps so you can move forward.
As a business owner this step can be confronting, and this is where an advisor for business can really help. By reviewing the ins and outs of your business – and defining what isn’t helping you reach your goals – our business advisors can identify what needs to change and advise on how to do things better.
Leverage the power of financial insights
From monthly expenses and revenue, to forecasts and job bookings. Your financial data holds a wealth of actionable insights and opportunities to build a stronger, more resilient business.
Numbers tell the story of where your business has been, where it is today, and where it’s going. And understanding those numbers is critical for you to move forward.
The key? Having up-to-date or live financial data. If not, you could be making business decisions based on old information and you won’t have an accurate picture of where you are today.
Knowing what data to use is also essential. For example, many businesses use their bank balance to assess cash flow. However, this alone won’t give you an accurate analysis of your cash flow as it doesn’t show the full picture of money coming in or out.
Not sure where to start or don’t have someone internally that can help? That’s where your accountant or an advisor for business can help. As chartered accountants and business advisors, we can uncover the insights you need to make informed decisions and set your business up for success.
Identify and minimise potential risks
It’s impossible to future proof your business entirely, but you can identify where (and what) these risks are and minimise their impact.
With business impacts ever changing, it’s important to regularly review potential risks as well as the measures you have in place to minimise their impact. That is why our business advisors recommend regular risk assessments as part of business reviews.
Some industries are also changing faster than others, such as the building and construction industry. As well as trade shortages, builders are dealing with the ever increasing costs of materials, decreasing customer credit and delayed payments. Each of these challenges are potential business risks, and while they cannot be completely avoided steps can be put in place to minimise their potential impact.
The Australian Cyber Security Centre (ACSC) has also seen an increase in invoice fraud and other cybercrimes – especially in the building and construction industry. This leads us onto our next point: technology.
Investing in technology isn’t a business strategy just for large businesses, and is just as important for trade and service industries. Technology can:
- Free up time and improve your time management
- Unlock valuable resources, increasing your billable hours
- Give you access to better insights
- Ensure you have access to more accurate and live data
- Provide better protection for your business
The biggest misconception is doing it yourself is cheapest. However, ask yourself: How many hours is this taking me? A $100 software subscription could give you back 10 hours each week, giving you 10 extra hours to dedicate to billable work or to spend with your family. Going digital can also improve your level of security.
To give you the insights you need to grow, accounting software is a must. This will give you the financial insights you need as well as stop things falling through the cracks, such as estimate variations and payments.
It’s also important to look into software specific to your industry. For example, if you’re in construction there are now estimate tools for home builders with built in live pricing updated daily by quantity surveyors and estimators. The result? A more accurate (and profitable) estimate.
With so much on the market it can be hard to know where to look. And this is where an advisor for business can help. With clients across multiple industries – from building and construction to professional services – we can help you uncover the right business tools.
By applying these steps, you can start to build business resilience and implement future-proofing measures to keep you future focused.
However, just as your business continues to change so do your risks and future goals. That’s why it’s important to regularly step through this process with your business advisor, ensuring you have the right tools and measures in place
Together we can get you off the tools, build a better business and create the financial freedom you need to reach your goals.
About John Pititto
For over 20 years, John has been helping businesses – big and small – build a better business and create business freedom. As a Chartered Accountant and business advisor, John is all about relationships and getting to know your business inside and out. The result? Tailored advice focused on you and your goals. A devoted family man, when not in the office John loves spending time at the beach with his wife and three children.