Despite 40 years in the property business, I never cease to be fascinated by what separates the most successful businesses from the rest. One of the key differentiators though is that successful businesses nearly always have a detailed written business plan. The crisis caused by coronavirus has demonstrated very clearly why business planning is so important.
If your business is going to survive this crisis you will need two business plans one setting out how you will survive the next 3 months and one setting out how you will survive the upturn. The first plan is a relatively easy one to write as it is mostly about cutting expenditure and conserving cash. It will probably include:
- Postponing your next VAT payment
- Postponing the second payment of income tax on account
- Asking to postpone your corporation tax
- Asking to postpone your payroll tax
- Furloughing some of your staff
- Cutting expenditure to the bone
- Deferring the rent on your shop
- Renegotiating payments with your suppliers
- Chasing all overdue debts
- Completing on as many of your sales in progress as possible
By doing some or all, of these things most businesses will survive the next 3 months
The business plan for the recovery will however be much more difficult to write. It will be similar in many ways to what you did to survive the 2008/2009 downturn and the hardest thing will be judging when the right time has arrived to get your foot back on the gas.
The plan will probably include:
- How to keep hold of your existing instructions
- When to start your marketing for valuations again
- How to improve your conversion ratio of valuations to instructions in a market where fewer properties are coming to the market
- How to increase the instructions to sales ratio in a market where buyers confidence has been dented
- How to minimise your fall through rate at a time when buyers are very nervous
- How to increase your fee level to compensate for the reduced number of sales
- How to maximise your income from selling conveyancing and mortgage services
- How to keep your costs down
The finished document should be 15 to 20 pages long and should set out your goals and strategies in such detail that a stranger could implement them for you. The discipline of completing a document in this level of detail will force you to think deeply about how to optimise every aspect of your business and this will play an important part in your success. This crisis will be survivable for most businesses but only if you plan your strategies in detail right now.
Adam Walker is a management consultant and business transfer agent who has worked in the property sector for over 30 years. Visit www.adamjwalker.co.uk or phone us on 0845 226 9053. We look forward to hearing from you.