Evaluate and Plan
We are going through unprecedented times where uncertainty and not being able to go about our normal ways of lives is a new norm. Whilst all of us are looking forward to kick-starting our lives and businesses from the realm of lockdown, a lot of businesses are dependent on how shopping habits and spending criteria would change in days to come.
There is no doubt that we will see changes in our lives, workplaces and in our businesses. For some, this would bring new opportunities and, for others challenges. Those with clear thinking, flexible plans, willingness to accept the change and an ability to transform would emerge as successful, of course, profitable as well.
Businesses, although keen to go back to serving their customers and clients, will have to carefully plan their return to normality. The time is now to plan with a forward-thinking hat on. Anticipating a gradual lifting of lockdown, businesses should plan for their re-opening, look at their supply chains, cash position and evaluate their business model.
We will see changes in spending habits and in the ways we have been operating such as large office spaces, shopping malls and multi-storey shops may have to re-think their plans. Similarly, leisure, aviation & tourism and entertainment sectors may see major changes due to social distancing measures.
There is no doubt that social distancing in the medium to short term would affect businesses and their profitability. Companies that are able to adapt to this change and are in good financial health will survive the challenge but those that were already on a weaker ground prior to current lockdown might struggle.
Have a road map
Cash is king, a statement we have heard all our lives but businesses may soon discover true meaning of this in coming days when suppliers might be asking upfront payments or changing credit terms to the immediate settlement of invoices. Challenges like these whilst customers struggle to pay for services on time, will test resilience levels and availability of cash may become a turning point for companies post lockdown. Hence, businesses should look to conserve cash where possible, analyse their outgoings and aim to reduce both fixed and variable costs during and after the lockdown is lifted.
For businesses to adapt a changing landscape exacerbated with social distancing following should be carefully considered:
- Evaluate business plan and make it flexible to meet changing environment & demands
- Plan how to survive a 25% to 50% fall in revenues in medium to short term
- Similarly, also keep plans for an upsurge in demand in case being inundated with orders if you happen to be in fashion & retail sector i.e. a reliable supply chain will be a plus
- Consider how to fill funding shortfall due to reduced turnover
- Re-evaluate, innovate and transform your business models and the way you operate
- Reach out and negotiate with your creditors to agree some sort of payment arrangement
- Seek professional advice if you foresee challenges to your business and its survival
With a focus on the above, businesses with new ways of selling their products and attracting customers, are likely to have an edge over others in challenging times that lie ahead.
There are a lot of ifs and buts, dependencies and unknowns, however, those who would persevere, able to withstand ‘new norm’ and carefully plan their return to normality will emerge successful. There will be businesses who would benefit from ‘new norm’ whilst some may become a victim of this. However, staying ahead of the game may put a business in the winning league.
How we can help
If you think that your plans and adaptability is not working, then do seek professional advice from your accountant or from a restructuring expert to discuss your options before losing it all.
Get in touch with our experienced and knowledgable practitioners who can provide support.