Risk factor; MSME should OvercomeMay 16, 2020
Family / Partnership Issues in BusinessAugust 4, 2020
Lock down has given an opportunity to think from scratch; like Zero Base budgeting.
Business will re-start gradually, providing multiple opportunities”
- Survival Need; take Core team into confidence for substantial improvement
- Target to reduce major part of fixed salary; restructure it with performance incentive
- Remove inefficient / underutilised resources by assigning additional responsibility
- Implement attractive Incentive Plan in all function; with transparency
- Strict performance benchmark (30%-40% improvement) in all functions
- This informal partnership will build loyalty, stability and performers.
- Invariably collect data (develop MIS) in: procurement, production (all processes), quality, sales, inventory, supply chain etc.
- Inter Department conflicts has to go; both individual and team performance will matter
- Free flow of communication with core teamand management is critical
- Regularly compare Actual performance of all departments with Benchmarks – daily –weekly and monthly – for continuous improvement
- Outsource non-core / non routine work – where full time person not required
- Convert Capex into Opex (lease – rental) / Allow Work from Home, if can be monitored
- Be transparent and genuine in sharing – share some part of efficiency as incentive
- For Entrepreneurs, too difficult to implement but inevitable – since it will reduce fixed cost and improve efficiency; this will become a new routine (Stay light)
This is the time to set example of leadership and transparency which will eventually take organization into a different league and make it future ready.
“Something good comes out of every crisis.”
Your Virtual CFO
CA Sunil Shah