A long time ago when accountants wore ties, met their clients in person and talked to their colleagues face to face (i.e. February), many of our clients were booming and we decided to produce an video about the 60:30:10 rule of growth.

Obviously, life was about to change dramatically.

For the past three months, most of our focus has been about helping clients survive not grow.

But we now think it’s worth re-launching that particular video. Not because many of you are going to be booming but because having been in hibernation for a few months or running at very low levels of activity, effectively many of you are now running the equivalent of a fast growth startup.

The detail of this approach is in the video but in essence you need to identify the thing that is preventing you from growing right now and allocate 60% of the time you spend on strategic activities addressing that issue. Then you allocate 30% of your time on the thing that will be the issue that will stop you from growing if you solve the first issue and 10% of your time on the issue that will be your limiting factor if you solve the other two.

The video outlines the usual limiting factors in any business but of course there are some new challenges to be added to the mix currently including a whole number of new regulations and safety issues you need to address.

Of course, the beauty of this is that you can condense all that experience you’ve built up over the years to grow your business at a much faster rate than you did the first time out. It might be fun. You never know.

But only if you quickly accept what you’ve lost and start the re-building process early.

After the financial crash in 08/09, there were many businesses who tried to come back from the downturn by operating in exactly the same way as they did before. Huge mistake.

There were also many owner-managers who weren’t prepared to reduce their standard of living. As a result, their businesses were under massive cash flow pressures. And that always results in short-term decisions being made.

The Bank of England identified that businesses which invested in themselves (marketing, systems, recruitment, training etc) ultimately grew whilst those who were too cautious saw big falls in market share which in many cases were never recovered. Whilst this was an analysis based on large companies, it mirrors the experiences that we saw amongst owner-managers of smaller ones.

Having told everyone to raise the bar last week, that doesn’t work if it’s too high in the first place.

You need to re-set your own personal bar. Setting it too high and unreachable is just demoralising and counter-productive. Because the one thing that makes people happy is the feeling of making progress.

Fortunately, most owner-managers are fairly pragmatic. A recent survey suggested that only 2% of businesses expected their turnover to return to its previous levels within 3 months. 15% said it would take 4 to 6 months, 34% said 7 to 12 months, 48% said it would take over a year and 2% believed they would never return to previous levels.

But we’re all living in a bit of a weird fairy tale at the moment. Mortgage payments have been postponed, the government is paying employee wages and the sun has been shining.

The real challenge lies ahead. And being in denial about how tough this is going to be over the next 18 months isn’t the answer. Remember the Stockdale Paradox from one of my earlier blogs? The optimists died first!

With that in mind, I stumbled on an episode of Frasier (the most successful sitcom ever in terms of awards) where Frasier lost his job and went through the classic five stages of grief:

  • Denial
  • Anger
  • Bargaining
  • Depression
  • Acceptance.

There’s plenty of stuff on the Internet about all of this and I’ll leave it to those who are interested to research it themselves.

Perhaps the biggest and most important part of my role as Managing Partner at A4G is spotting problems and trying to get someone to accept that there is a problem. This rarely wins me popularity contests at the office and I doubt it will win you a popularity contest in your business.

But to help, I’ll give some examples of each of the five stages with my answers, so you can hopefully identify if that’s where you or one of your team are.

Denial

If I ignore the problem perhaps it will go away”.
It won’t

Anger:

It’s not my fault, it’s all because of Coronavirus
Yep but we’re all in the same boat. Get over it.

Bargaining

If I just ignore my other responsibilities, I’ll sort this one out
Oh great. So, we’re just going to swap one problem for another one.

Depression

It’s just too hard; I don’t have the skills to do that
Well then you better start building those skills by asking questions, reading or just simply engaging with the problem at hand

Acceptance

Yes, there’s a problem
Hallelujah!

My previous way of working is not going to solve it. What got me here won’t get me there
Exactly

I can do it. but I need to ask for help
Call A4G. If we don’t have the answer, we probably know someone who does!

The true challenge lies ahead. A new journey starts here. Get through those five stages and you’re ready to go.

And if you want some help along the way, sign up to our webinar next Tuesday that we are running with Metro Bank called “Making money in the new normal”.

Have a good weekend.

Contact me today!

Malcolm Palmer

FCA

Managing Partner

01474 853856

Send me a message

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