What can we learn from HMV and Blockbuster?

• James Richardson (Metric Accountants)
• Thursday 31 January 2013

It’s a tough environment out there. In recent weeks Comet, Blockbuster and HMV (plus many more) have all gone to the wall. But it’s not all doom and gloom. After all, there are lots of businesses - particularly small businesses - that are doing fantastically well. So what can you do to avoid the pitfalls and make sure your business thrives in 2013?

1. Focus

Are you clear about what will be the key determinants of your success in 2013? Our most successful clients do not get bogged down in the less important tasks but instead focus on what really matters to them and their business.

For example, one of our clients recently introduced a "KFC day". No, not a day dedicated to eating deep fried chicken, but a Keep Friday Clear day. He uses this day to focus on his business and to devise (and then put into practice) great new ways to improve his customers' experience.

2. Create awareness

It doesn't matter how wonderful your product or service is if people aren’t aware of it. Keep your customers and contacts informed of what you are up to, using as many channels of communication as possible.

Research has proven that during tough economic times, many business owners reduce the amount of time and money they invest in marketing, so it’s a great time for ambitious business owners to undertake regular activity to remain visible and get more "bang for the buck".

3. Invest

Certain business owners strip their business of every penny of cash, starving them of much needed capital. Successful businesses recognise that all operations require maintenance and rejuvenation in order to keep the business fresh and efficient.

A valuable business is a growing business and if you simply extract everything via dividends your future nest egg will start to shrink.

4. Manage your cash

As a business owner, you’re probably aware that the majority of business failures are due to lack of cash. But how can you prevent your business falling into this trap?

Our most successful clients plan for the regular cash flows and ensure that they retain a sensible surplus for unexpected expenses. What's more, they regularly manage their cash position by comparing their actual cash balance against expectations.

5. Learn and adapt

Those business owners who constantly search for new ways to reach their audience, improve their product or streamline the process will capitalise on opportunities that their competitors can only dream about.

Don't fall into the trap of saying "If it ain't broke, don’t fix it" to new ideas and technology. They innovate and make sure that potential newcomers are kept at arm’s length. As the likes of HMV and Blockbuster have learnt, no commercial formula lasts for ever. The old cliché still stands - adapt or die.

www.metricaccountants.co.uk

Comment below!