In Stuart Craig’s experience, their threat is real. “When Zombie companies collapse, they take other businesses with them. We see it time and time again, particularly in sectors like construction, where if a developer collapses, their subbies and suppliers are often left high and dry and in a world of pain.”
Things are opening up and restrictions are loosening. Now business owners need to see if they still have a business, and what sort of shape it’s in.
Review, Revise and Reset (again)
Stuart says, “This means doing what any good business owner should do – analyse cash flow (with and without JobKeeper and other Stimulus receipts), income, debts, leases and staffing. And plan to work out whether your operation is still viable and healthy. Part of that process is to keep having the six critical conversations I identified when the crisis began and refresh them. And keep doing it.
You need to be having conversations with:
But what do you need to be talking about? And what do you watch for?
According to Stuart, the first thing you need to do is look in the mirror and check you are not infected. “By checking your health, you can work out exactly where you stand and what your risks are – in precise dollar and timing terms – which are clear and understandable.”
How do you spot and protect yourself from the Zombie hoard?
Part of the conversations, and your own planning is to watch for warning signs that you are dealing with a zombie company. They are usually bad debtors, make late payments, undercut the market on price, overpromise and underdeliver on service and are loose with terms of trade and contracts.”
Stuart recommends working with your trusted advisors to ensure you have the right level of weaponry and protection in your anti-zombie defence kit. Stuart works with businesses that need to restructure or want to grow, and he says, “Get legal advice, look at PPSR, your terms of trade, your payment terms and contractual agreements.”
Some of it is mindset. “Plan to survive / work to thrive,” says Stuart. “If your business can’t do that, it is a Zombie. If it can, be like the survivors in the movies – arm yourself, and get ready for the sequel!”
