As it rapidly becomes apparent that Coronavirus is going to hit the whole of the economy, it is easy to sit back and watch events unfold, but to do so in business is the quickest way to failure says, Adam Parkinson.
- 3 things you must do, starting today to protect your business
- Impacts and risks of the government’s stimulus package
- Where to get expert advice and support
With his extensive experience supporting Australian businesses to reassess their operations and successfully implement turnaround strategies, Adam has seen first-hand just how businesses that act today can survive and thrive tomorrow.
“Coronavirus should not be underestimated for the impact it will have on businesses. We see it at the top end of town where global organisations like Apple [1] are paying the price for being reliant on a single source of supply and at the small end where a drop in customers, supply and resources is hitting just as hard.”
You Must Act Now – What to do today
But there is hope for businesses that take action immediately, especially smaller companies which by their nature are more agile, nimble and able to see the impacts of changes they make directly. According to Adam, there are some golden rules that a company director should be following:
1 Take a laser focus on every element of cost in your business – examine every aspect of your business’s costs from payroll to finance and be sure of your expenses across the next 3 months. Then look at what is essential spend and what you can afford to cut back on.
2 Assess your current stock and inventory – thoroughly audit your stock and items on as quickly as you can. Stock sitting in a warehouse or on the shelves is an asset that you can turn into cash, so look at strategies to reduce stock and to move on as much as you can.
3 Collect your debts – If you are owed money, now is the time to collect. Consider how you can recoup outstanding amounts and think about services such as invoice factoring or debt recovery specialists to get you your money to you as quickly as possible.
“As a business owner, you need to get onto those things on day one. Your revenues will be impacted, so your only short-term area of potential pain relief is to make your business as lean as possible. In my experience, this cost analysis needs to form a 13-week cash flow model that gets you through the immediate future and lets you have total visibility of the scenarios associated with the changes to your business.”
“The next thing to do is to thoroughly analyse every aspect of your business model and ask tough questions of your operation and its immediate viability. As a minimum, you need to question the immediate relevance of your product or service to your market and anticipate the change in revenue and demand that you will have.”
“Analysing your business model is only the starting point. You need to be able to plan to either consolidate, scale back or diversify, and you should engage a professional to support you.”
Do Not Wait for Stimulus
Adam also believes that waiting for government intervention can harm your business in the long run, “You cannot sit around and wait for government help. Any stimulus, like the ones just announced, will not scratch the surface of the impacts of Coronavirus because, other than straight cash handouts, accessing packages is often a slow process – and it will take time for any funds to reach their intended target.”
“Governments are also very limited in what they can do to stimulate the economy. We were already fighting off a slowdown in part caused by bushfires and drought. Our interest rates are lower than in living memory, and consumer sentiment will take a huge hit, so there are not many things that government can do. Waiting for their help is a false economy,” says Adam.
Who To Turn To For Expert Advice
If your business needs professional advice to get you through the next few months, Thesolvers.com.au has a panel of experts like Adam, with decades of experience in helping companies to meet challenges, build robust strategies and go on to future success. Contact us to learn more.
