There was no business playbook when coronavirus arrived. However, being proactive has helped mitigate the impact. Discover the most impactful calls leaders just like you have made and the effect each one has had.
Invoicing quickly, in smaller bundles
John Williams, founder, SpaceInvader: “We decided to focus rigorously on cash flow, including some tough early decisions on redundancies, because we knew that even with furlough payments some of our projects were not going to come on stream again for a long time. HMRC breaks in PAYE payments were crucial, but the real long-term lesson was to invoice more quickly, even if in smaller bundles, and to review cash flow not just monthly but weekly.
“Our existing situation meant we invoiced at the end of the month, so we reviewed each project and identified instead where we could invoice before that, based on the completion of project milestones. We couldn’t do it on every one, but there were some where we could. This simply meant cash came into the business more quickly. By increasing invoicing frequency – along with using the furlough scheme, having a robust redundancy strategy and really focusing in on cash – we reduced our debtor days by ten, which has given us around eight to nine per cent of our turnover available as headroom each month.
Calculating project return on investments
Helen White, co-founder, houseof: "Coronavirus has proven to be challenging for every business and managing cash flow is more important than ever before. At houseof, we are analysing every internal project and reviewing where we are getting the best ROI – in speed and in monetary terms. Each project throughout the coronavirus pandemic has been scrutinised to ensure our capital is being deployed effectively. Projects where we see investments paying off longer term have been halted and we have focused entirely on projects that have quick returns.
“For example, we’ve been very focused on our conversion rates across all marketing channels and have reallocated capital to the highest performing channels and removed budget from those that haven’t been performing as well as we would have liked. Our pay-per-click ads and organic search have both had handsome returns on Google, whilst social media has been performing poorly compared with our pre-coronavirus results. We are monitoring performance across all channels on a month-by-month basis and allocating capital accordingly.”
The right tech for different people
Charlotte Evans, associate director, The Double Unit: “Rather than investing in new tools or products, we decided to give serious consideration to what works best for us as individuals. One of us suffers from Dyscalculia, which means spreadsheets are a complete nightmare to work with. So, instead, that person uses a pen and paper with regular reporting.
“We also felt that project management software need not be so intrusive – sending us aggressive reminders about tasks overdue – so we scrapped it in favour of a work plan structure we have created ourselves, allowing us to carefully manage all tasks for our clients and the business in a way that works for us.
“We do appreciate that shifting from software to good old Excel and a notebook is easier for a smaller team to do, but I dare say there are many big firms which would probably feel the same. It's all too easy to panic and jump into situations we are totally unfamiliar with, as the last few months have shown, but actually sitting back and taking stock, analysing what tools you really need to do your job in the best way you can and ensuring you are able to communicate easily (but not unnecessarily!) with your team is invaluable."
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