You may have already heard that we are getting a Government stimulus package of $17B but it’s important to keep in mind that you’re not going to be able rely on that, you’re going to need to take control of your business.
We are taking the ‘Now Where How’ approach with our clients at the moment.
- First, we will be looking at where they are NOW by using various diagnostics to assess their financials and the position of the business, not just from a financial perspective, but overall.
Then we look at and discuss the challenges they are facing. Is it a revenue based problem, a supply chain problem. or is it both? We look at their concerns and what is really worrying them about the current circumstances. Is it about whether their customers will ultimately pay them, or perhaps that they might need to put off staff? We are also talking to them about the potential for any opportunities because often in adversity, opportunities also arise. Is there the potential to take over targets where they can pick up additional business because someone else is in a position where they need to bail-out. So, we have been helping them look at where these opportunities could be.
- Then using our normal planning process, we look at WHERE they want to be.
In the current crisis, you’re not necessarily going to be able to control where you want to be and how you’re going to get there. Therefore, what you have to do is look to see what are the various scenarios that will be impacted? In that regard, we firstly ask, is the impact only going to be mild? What will a mild impact mean for your business? How will a medium impact affect your business, what will it mean financially, staff and marketing wise? If it’s deep, it’s going to have a significant impact. What will that mean? We have been doing some scenario planning around that. Scott Morrison stated yesterday that the effects are expected to last 6 months, but what if this goes for a further12 + months?
- That brings cause to ask, HOW you’re going to get through all of this.
In that regard, we firstly look at the risks. What are the significant risks you are facing in your business and how we deal with those risks. Is it licencing issues, staff or supply chain risks that either cannot be fixed or are going to cause a significant impact? In regard to cashflow, remember ‘Cash is King!’ so maintaining cashflow at the moment is absolutely imperative as well as trying to maintain profitability. You might see a dip in profits, but can you avoid going in a loss situation and if it is a loss, how we can we mitigate that. How can we eliminate the wastes in your business, that is, the things that do not provide value from a customer perspective.
How can we improve the systems to generate more cash and save money. There is also the opportunity that you can grow your business. For example, a client of mine has a grocery business at the bottom of a high-rise building, this is a great opportunity for him to provide home delivery service for those who might be self-isolating.
You can then ask the question, how do we deal with the bank? Do you need your bank or major suppliers support? Don’t just go to them saying “we need help” you need a credible plan that outlines:
- Your current position;
- How you are addressing the situation; and
- Your scenario plan.
Show them what you’re going to do to mitigate the business as well as what they can do to support you in the short term and explain how they will be better off by helping you through this so that you survive and don’t become a statistic of a business failed.
Thousands of people have already died so far from COVID-19 and many more businesses will fail – don’t be one of them.
If you would like more information to see how we do this, contact Kestrel Solutions for a free, non-obligatory discussion on 07 3232 5250 or firstname.lastname@example.org.