A tech CFO shares how to go ''recession proof'' your SMB


Introduction

If you're like most startup or scaleup (SMB), you don't want to wait until it's too late to take steps to prepare your company for a recession or even cash rich or scale ready. That's why we asked tech CFO with two exits, and clients in the Top 100 fastest-growing SMEs in Europe (FT list), how to go "recession proof" your SMB. Here's what he had to say:


Learn to read the signs

You should be aware of the signs of an impending recession and be prepared to act quickly when it happens.

  • Recognise the signs of a recession:

  • Deterioration in consumer confidence and spending habits, such as slowing MRR and increasing cost of acquisition.

  • Declining stock prices, which may lead to further deterioration in consumer confidence and spending habits, even if you are not public, keep an eye.

  • A decline in real estate values, we have seen a great rise but nothing goes up in a straight line, this upcoming decline could be challenge.

Shorten the sales cycle

Your first step is to get your head around the customer's buying process and shorten sales cycle Hayat Amin recommends the following:

  • Understand their needs: Use Sales intelligence, so you know everything about your future customer.

  • Understand their purchasing process (how they go about making decisions)

  • Identify where in the decision-making process you can interact, again!

  • Equip sales team with data. It will change everything.

  • Create a data driven culture.

Create a Financial model, a budget and a cashflow (yes they are different)

A financial model is companies vision into numbers.

A budget comes from the financial model, its an action plan for all departments

A Cashflow is tight management and measurement of vision and action plan


Understand cost ''IMPACT''

''It frustrates me when companies do not know or work on understanding how each spending line impacts business''. Hayat suggests you use digital transformation practices and bring day-to-day operations online using platforms like Trello or Monday, tracking each operation's goals and costs associated with it from spending on people to new laptops. Clearly create a correlation between cost and operational business impact. This will change everything! Great companies do this.


Put contingency plans in place

This is a continuation of the blog series with Hayat Amin.. to be continued..


You can speak directly with Hayat Amin for free

Hayat Amin takes 5 clients at a time for advisory, this way he provides full impact and focuses and also saves you 70% of the costs of hiring a full-time CFO. Book a meeting now.



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