We hear the words “uncertain times” a lot right now, but it is truly a precarious future that businesses face. How are you positioned for the rest of 2020 and the remainder of the financial year? Are you prepared for what’s on the horizon?
When the Coronavirus pandemic hit, many businesses experienced disruption and had to abruptly change direction. As government concessions begin to wind down in September, businesses will likely have to change again.
However, whilst periods of disruption can lead to headwinds for some, they can also create tailwinds and opportunities for others.
So how can businesses prepare for the unknown and position themselves better to be more resilient and take advantage of new prospects now and in the future?
Here are our four top tips:
All eyes on costs and cash: Review your cash flow forecasts
Regular cash flow forecasting needs to be a fundamental component in the management and planning of your business to help build your financial resilience. Inadequate cash flow forecasting can leave businesses dangerously exposed in hard times or unprepared when they need to demonstrate sustainability to external parties. Read more on our cash flow forecasting tips here.
Communicate openly with everyone including suppliers, financiers, customers and staff
Whether it is staff conversations, supplier negotiations, banking and finance discussions or liaising with the ATO, businesses need to communicate openly with all stakeholders and plan and prepare for potentially difficult conversations. By preparing for possible scenarios now, you can be ready to act if, for example, you need to scale back operations or make changes to your supplier arrangements. If you need assistance with ATO negotiations, contact your Pilot advisor.
Remain agile and open to new opportunities
During the pandemic, we’ve seen many businesses pivot to survive. Distilleries produced hand sanitiser, companies adapted to produce ventilators and medical professions embraced telehealth. While many businesses radically changed their operations, many struggled to stay afloat.
By planning now for external factors that may affect your future business operations, you will be have greater flexibility to take advantage of opportunities for your business as they arise. You can then be responsive to opportunities that are aligned with your brand and your business capabilities.
Plan, review and plan again to protect your business
Businesses will be in a stronger position to respond to any changes in the business landscape if they plan effectively. As well as cash flow planning and forecasting, our recommendation to all business owners is to plan for different scenarios.
Scenario planning helps businesses develop plans that can be enacted based on potential triggers or events. Not only plans that might be directly related to the likes of COVID-19 implications, but longer lasting ways your business will operate into the future. By running a realistic and a worst-case scenario plan for the business, you can review how the business would respond and have measures in place should these scenarios arise. By regularly reviewing these plans, businesses can minimise any financial surprises and ensure future plans are as robust and realistic as possible.