Business Resilience

Wow, the world has changed so quickly in one month. We are in a unique situation where governments have instructed so many of us to stay at home. This means that for those of us with businesses that are not essential services, they have been closed down. Some of us are running our businesses from home, consumer spending has dried up and the world economy is in freefall. 

This is winter; we don't know how long this will last and we don't know how the world will look when we open up again. This leaves us with a lot of uncertainty. Right now, your focus has to be on how you survive in the next few weeks to give yourself time to work out the next steps. 

Business resilience is the ability for an organisation or business to  plan and react quickly to disruption caused by external forces, while maintaining business operations including people and assets. It also involves taking steps to survive and still have a future.

Putting your head in the sand will not help your business. Now is the time to implement those plans to survive.  Ask yourself: can your business recover from this set back and keep going in the face of adversity?  What steps can you take to save the day? Here are a few ideas for you to consider to start your action plan - do this today. 

1. Firstly, do your cash forecast: depending on the type of business you are in, this might be weekly or it might be daily – either way, you need to forecast your cash  requirements at least three months out from now. Ask the following questions: What is your worst case scenario? What is you gap if you get no sales for a month for two months? How long can you carry your staff? 
   (the gap is between what resources or cash you have and what you need to survive.)

2. Then you need to adjust the cash forecast for scenarios:
   1. What costs can you remove immediately (some of these have already been removed by the lockdown situation).
   1.i. Daily coffee, lunch purchase, uber eats
   1.ii. Travel 
   1.iii. Training plans, expansion plans
   1.iv. Interest only debt – call the bank to ask if this is possible to set up
   1.v. Lease reduction – ask your landlord for a temporary reduction in rent, especially if you can't use your premises.

3. What assets can you sell? 

4. What funding resources do you have? Can you get another overdraft? Is there a loan you can draw down that you haven't used? 

5. Staffing: the last thing you want is to let your staff go but sometimes there is no other way. So identify which staff are essential to your business. When you can start trading, who are your stars? Who delivers your income? Consider other options – job sharing, part time?  

6. Are there alternative sources of revenue that you have not been able to tap into because of capacity restraints (i.e. you didn’t have time or the staff to do the work) ?

Consider whether these are going to be available when you're able to start operating again, as your current customers may also be impacted by the situation and may not be able to spend what they previously spent. You need to look beyond this situation to potential opportunities as well (e.g. could you combine resources with another business, is the lockdown changing behaviors that you could benefit from) and think about how to access these once you are out of lockdown. 

Remember this is about survival and you are not the only one affected. Everyone needs to give a little if we're going to make this work and if we're all going to come out with some sort of normality. This means you might need to consider extending your credit terms for your customers, ask for credit extensions from your suppliers, reduce the amount of wages you pay your staff but keeping paying them. 

Every little bit counts and every little bit of time wasted makes it worse. Start this process now and give yourself time. This applies to you personally as well as your business – you need to make cuts to your personal spending as well. 

Take action now, I’m available to help during this time, call or text 027-3080103  (or email rachael@cfopartner.co.nz) to organize free 30 minute zoom session to discuss your needs and what you can do now.