Two Vital Things You Need to Do to Protect Your Business| North Loop Official Blog
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10 Dec 2020

Two Vital Things You Need to Do to Protect Your Business

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Introduction -

A lot has been spoken about the health and business impacts of the pandemic, but what has not been emphasised enough are the methods by which businesses can navigate the financial operational challenges of coronavirus. It has become crucial for businesses to manoeuvre through uncertainty by taking actions that not only accelerate digital transformation but also establish variable cost structures and implement agile operations.

A focused strategy to reassess assumptions, re-evaluate scenarios and strengthen the ability to sense and respond while addressing the needs of their people, customers and suppliers can reduce the impact of the pandemic and help in creating a secure recovery game plan. In this article, we will talk about two vital things that you need to do to protect your business in these uncertain times.

Protect your operating cash -

Operating cash is like oxygen to your business. To keep your business healthy and running, it becomes of paramount importance to protect your operating cash. We are listing down the steps that you can take to do so and to stop your business from closing down -

The first step involves printing out your itemized P&L or the credit card receipts for your business. Next you can go through all of your expenses and create segments for each of them. For example, you can use different colours to highlight all the various expenses. For example, you can use red for those that you need to cut down on immediately and yellow for expenses that you either might need to keep or cut out if the business starts to slow down. Similarly, other colours can get used for those payments that you must maintain for your business to stay afloat etc.

After highlighting all of your expenses and segregating them based on priority and importance, you can eliminate the ones that get marked in red. For the yellow ones or those expenses that you are still unsure about, you can put a plan together to figure out whether to cut them off or not. The expenses marked in green can remain as they are necessary for your business to function.

To plan for the expenses that need figuring out, such as those marked in yellow, you can ask yourself questions about the specific results that you need to maintain or achieve. If you realize that you can drop those results without it majorly affecting your business, you can go ahead and eliminate those expenses immediately.

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Protect your core clients -

Core clients are those with whom you do business with regularly. These core clients are the people who depend on you to meet their needs and come to you with a problem that can get solved only with the help of your product or services. It is these people on whom your business depends and therefore, focusing on them can get beneficial in many ways.

Most of the research done on business fundamentals, sales acquisition and related subjects state that acquiring a new customer costs much higher than keeping existing ones. Therefore, it is always a wise decision to spend time to understand them better.

To protect these core clients, you should try and get to know their specific needs, wants or desires and find out what it is that you can give them that nobody else can. It is necessary to assess why your clients wouldn’t want to go elsewhere for a similar type of product or service so that you can work on the same and improve it further.

You can also ensure that the experience you offer to them is superior and incomparable to those given by your competitors. It could also be the solution to a problem that only you can solve and nobody else.

You also have to understand the difference between a need and a want. A need is something that people cannot live without, whereas a want can certainly get eliminated in life. So, if the need for your business product or service does not exist, the business relationship can end immediately.

Once you complete enough research on it and get answers to all your questions about customer needs and their problems to which you provide solutions, you can work on those aspects to ensure that your core clients always stick with you.

It is when you master the above aspects of a business such as learning how to protect your operating cash as well as your core clients you can ensure that your business remains afloat even during tough times.

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.