3 Ways You’re Risking Your Business in 2021
It’s been many months of lockdowns and restrictions, and the strain is showing everywhere. And unless your business operates on one of the rare models that benefit from a pandemic, you are probably growing a little weary of hanging on.
With more virulent COVID-19 strains slipping into our communities while vaccine delivery hits new barriers and case numbers continue to rise, most of us are looking forward with a fluctuating mix of optimism and concern. It is becoming clear, despite what anyone wants, that the real recovery is many months away.
That means as entrepreneurs and business leaders, we are still miles away from predictable times. And what’s worse is that many are operating in ways that drive up, rather than minimize, their future risk.
Here are three risk factors I’m seeing daily, and actions to turn each one around.
- Sticking Your Head in the Sand. The single biggest contributor to bad debt writeoffs is procrastination. Even during good times, by the time an account is flagged as a true problem, it can often be beyond recovery. During a financial crisis like this, 60 is the new 90. Tighten, rather than loosen your standard timeframes to be ahead of the pack when an account is struggling to pay. It’s important to perceive recovering debt as a race against other creditors, where anyone but the winners will miss out big-time. Clients who send us overdue accounts promptly are seeing dramatically faster results and a high rate of of success than those who wait. Get your head out of the sand and back into the game!
- The Sunk-Cost Mentality. Experts in behavioural economics remind us that humans have a foolhardy but hardwired inclination to languish on prior efforts and expenses, despite that we would be far wiser to invest our energy in creating future successes than on trying to extract value from the past. When you send an account to your collection agency, you can achieve the best of both worlds—maximizing your Net Back while returning your mental focus to the skills and expertise that create future value.
- Failure to Evolve. Many businesses that are already recovering from a significant impact are succeeding through reinvention. Meanwhile, those struggling the most are the ones with a “wait with fingers crossed” recovery strategy, merely hoping things return to the way they were before the economy went into the dumpster. News flash: the world is different, and the future will in many ways never resemble the past. The best time to find a place for your business in this new normal was a year ago. The second best time is now.
If your business is putting off dealing with cash flow issues, focused on sunk costs or if your recovery plan is heavily reliant on bygone strategies, you urgently need to make changes.
There’s an exciting new future ahead, and you want to be part of it. My team and I can help. Remember, you can submit overdue accounts for collection day or night with MetCredit’s secure online debt recovery platform. And be sure to download my Business Recovery Guide using the link below for help creating your own smart and actionable plan.
President and CEO of MetCredit, Canada’s top-performing consumer and commercial collection agency