Tips and advice from Santam to support your business
Santam understands that you’ve worked hard to build a business that your clients rely on. We also know that running a business comes with inherent risks and that as a business owner, you assume responsibility for the well-being and safe-keeping of your business and its people. That’s why it’s important to protect your assets, both business and personal. One of the best ways to do that is to make sure you and your business are adequately insured. Whether you’re running an animation business or an accounting company, Santam has more than 100 years of experience and in-depth expertise to insure South African businesses good and proper.
4 tips on how businesses can navigate today’s complex risks
1 May, South Africa: An entrepreneurial spirit is a mindset of constantly wanting to learn, share and disrupt the norm. This is even more vital when trying to keep your business afloat in the current economic environment the world finds itself in. Why? Because tough times often force focus and drive innovation, leading businesses to come out of the storm stronger and more accomplished than before.
Philippa Wild, Head of Commercial Lines at Santam, says, “This is unchartered territory for all individuals and businesses alike, with many facing loss of revenue, retrenchments or bankruptcy. According to the 2019 Santam Insurance Barometer, small to mid-sized companies had business confidence levels of 45% to 46% respectively, due to their ability to absorb the consequences of a subdued economy. In the current climate, these have decreased. However, now more than ever, South African businesses need to bolster their confidence, find opportunity in adversity and evolve in order to weather the storm.”
Below, Wild shares four key insights for businesses to keep continuity during this tough economic environment:
- Prioritise your people: Your employees are by far your most valuable asset, so put measures in place to protect them as far as possible. Ensure all your employees understand the hazards to their health and safety within the workplace should you be able to operate during the pandemic and implement all precautionary measures that you can to reduce exposure. In addition to this, offer as much financial and emotional support as your company can afford, if and when necessary, to encourage your employees to keep on producing at your normal standard.
- Prepare for post-lockdown: Now may be the time to review your business operations and services and upgrade to stronger, more efficient alternatives. If possible, consider updating outdated equipment or implementing key training for staff. Do a review of your business to see where there may be gaps that might have cost you revenue or gaps in the market that you can cater to. Use your time wisely and spend time reflecting.
- Refine your client journey: Client-centricity is key to long-term business success, especially in an age of unprecedented transparency. Map out your clients’ current journey at every touch-point – from awareness to post-purchase stage – then identify how you can streamline this to automate more of the admin and optimise the user experience (UX). Ask your clients and staff for input, conduct surveys, and test different solutions. Right now, encourage iterative micro-innovations that’ll enable you to learn but won’t cost you too much if they don’t work.
- Get up close and personal with your insurance: Now is the time toensure that you’re adequately insured and prevent any further losses. Interrogate your policies and make a checklist of what is covered and what is not. This way, you can pick up on where you are left most vulnerable and take the steps to mitigate risk. Speak to a broker to fully understand your insurance policies without making assumptions.
Wild concludes, “It is important to note that having good risk management practices, updated safety training for employees and clients alike, as well as a solid plan for the new normal can influence whether or not a business makes it past this next hurdle. To further bolster our clients’ businesses during this time, Santam has made R400-million available as COVID-19 relief to help clients, suppliers, and contribute to the Government’s Solidarity Fund.”
Santam. Insurance Good and proper. For more information visit https://www.santam.co.za or speak to your broker.
SMART CASH FLOW HABITS TO KEEP YOUR BUSINESS GROWING
According to research, poor cash flow management is one of the biggest reasons small businesses fail after they’ve launched. As an entrepreneur, good cash flow management is important to keep your company growing financially. Here are some tips to successfully manage money generated by your growing company:
Set up a cash flow forecast: Do trajectories for the next year or quarter, and update the forecast weekly. Identify when you expect to break even and establish the economic benchmarks necessary to meet along the way.
Balance customer and supplier payments: Money coming in must match or surpass money going out to save you from extended overdraft. To collect receivables (payments owed to you) timelessly, ensure you have an effective debt collection system in place and incentivise early or upfront payments with manageable discounts. Invoice immediately – don’t wait until month-end – and don’t shy away from asking for partial payments upfront. In terms of payables (payments you owe), negotiate with suppliers and vendors to get good deals and extend payables when possible.
Be frugal: Only spend on essentials that will help achieve cash flow forecast milestones. Save in the good months – you need a cash reserve to carry you through the hard times. Keep fixed costs low – such as your rent. Lower fixed costs mean more potential profit.
Invest in local marketing: Get your business name out there to attract more clients. Then retain customers with quality goods, exceptional service and a focus on real relationship-building.
Partner with the right people: Spend a bit more if you can to hire the right staff. Be open with your team and make cash flow management a priority for everyone. Don’t handle the financial side of the business – utilise the services of professionals such as tax experts and accountants to promote positive financial health. Build a relationship with the financial institution you partner with and ensure they understand your business mission and financial goals.
Look out for more business tips and advice on this page.
For more information, visit Santam’s Twitter, Facebook, Blog and LinkedIn pages.