COVID Recap
About the Author:
Laurence Sparke
Senior Accountant at Hayes Knight
Laurence is the Senior Chartered Accountant at Hayes Knight specialising in business advisory. At Hayes Knight we look beyond the numbers to take your business to the next level.
Given the current economic outlook and the critical need for all business owners to take an active role in overseeing the response, we feel compelled to re-emphasise the key messages that almost all professionals are now passing on to their clients.
The following is an extract from a recent article by Laurence Sparke of Hayes Knight:
The level of impact the pandemic and recession will have on businesses will vary depending on their industry exposure to the immediate effects. However, all businesses have been impacted by COVID-19 to a certain degree and to come through successfully, it is important to be pro-active by analysing your business and taking action rather than simply hoping for the best.
This is the time to review your business strategy and long-term plans.
Review current projects and identify new opportunities that may arise due to the crisis.
Review processes and identify areas where cost savings can be made.
Engage with critical suppliers to assess the ability to maintain product supply and evaluate alternative supply options.
Engage with customers if the ability to provide products or services is likely to be compromised.
Cashflow and liquidity will be a key issue. It is important to control debtors and update cashflow forecasts regularly to identify any pressure or shortfalls. Keeping your bank informed of both your position and business plan, as they are far more likely to extend lines of credit if kept informed and they can see that contingency plans are in place.
Your staff are a crucial part of your business and it is important to keep them abreast of your business’ approach to the crisis and how a safe and healthy environment will be maintained. Plans should be put in place to prevent and indeed cope with infections in the workplace now that we are out of lockdown.
With quality staff being in high demand and the cost of training new employees high, it will be important to retain existing staff during the downturn. Excess labour could be managed by asking staff to take leave owing, offering unpaid leave or looking at reduced hours for staff (put in place a four-day week). The Government’s wage subsidy scheme can assist in paying staff if certain criteria are met, but there is no guarantee that it will be extended again.
With many international borders closed, now is a good time to consider whether there is new or untapped opportunity for growth within the New Zealand market.
Senior Accountant
Hayes Knight
09 414 5444
It is strongly recommended that you involve all decision makers in your business and go through these points one by one to consider where you are placed and what you can do to maximise your opportunities and achieve a competitive advantage. The above checklist is not exhaustive. Brainstorm with your team and advisors. Perform your SWOT analysis and identify other strategies, given the uniqueness of your business and its circumstances.
- Ed
Related articles:
If you have not already, now is the time to ensure your team is thinking strategically about recovery. It is easy to get overwhelmed with the response process and the complexities of adapting operations to our new normal. It is, however, vital for long term success to allow time for some strategic thinking.