We know that the impact of COVID-19 is causing significant distress to business and business owners and causing liquidity challenges.
Business owners should consider these steps as they navigate the crisis:
1.Health and Wellbeing
Take the health and wellbeing of your people, customers and suppliers and the broader community seriously. Stay up to date with the latest information about the spread of COVID-19 and the steps being taken to slow the spread.
Establish a crisis working group with clear actions and responsibilities to manage the health risks.
2.Financial Impact – where are you now?
It’s absolutely essential that you work out your current financial position. Keeping your books and records up to date is critical to make informed decisions.
If you find this is taking up too much time within your business, there are affordable software solutions available to do the processing work for you. This will give you more timely visibility over cash inflows and outflows. Your Pilot advisor can assist you in evaluating and implementing the software required to streamline these functions.
To see where you are currently sitting, you need to conduct an urgent assessment of your short term cash position and consider the following matters:
- Cash Inflows:
- Who owes you money and when can they pay you?
- What do future income projections look like and will customers be able to comply with current payment terms?
- Cash Outflows:
- What accounts are due to be paid, how much and when?
- Review key supplier arrangements and impacts on supply chain, pricing and timing of payment.
- Are you eligible for Government incentives and how and when will these impact cash flow?
These incentives and polices are constantly evolving and Pilot will keep you up to date with what is available via our FAQs page.
3.Develop and implement strategies
Consider what strategies are available to changing how your business operates throughout this pandemic at both a financial and operational level:
- Be disciplined with managing accounts receivable and stock levels;
- Consider whether any cost savings be made?
- Can non-essential expenditure be cut or deferred?
- Consider alternative supply chain options;
- Negotiate new arrangements with landlords and suppliers;
- Reviewing major business decisions made prior to the pandemic – do they need to be deferred or realignment during this period?
- All major banks are offering assistance to businesses at this time. Consider what options are available for your business.
The impact of the pandemic on business is changing daily and it is difficult to know what new challenges will need to be faced. Be realistic and flexible in your planning by reviewing your cash flows regularly and adapting your strategies to address the rapidly changing business environment.
If you would like assistance to map out how a particular strategy or scenario may impact your business, your Pilot advisor can assist.
4.Communicate with your stakeholders
Clear, timely and open communication is essential in securing the ongoing support of the key stakeholders in your business, including:
Communicating is the key to ensuring your strategies succeed. This requires consistent feedback throughout the changes your business may face.
5.Look after yourself
Having a business in financial distress is personally challenging and it is important for business owners to be mindful of their mental health and wellbeing.
Our clients can be assured we are able to continue to support them during this period of uncertainty. We will continue to be available through all of our usual communication channels.
Please contact your Pilot advisor on 07 3023 1300 should you require any assistance.