The 3 Stage Plan to survive, revive and thrive through a V shaped Recovery.
Andy Fairclough provides insight on how best to manage the short term impact of Covid 19 on your business.
Stage 1: Survive (March-Apr 20)
Where we are now- Stabilise the ship!
We would always normally look at any business and its liquidity to make sure that it has the correct balance between reserves and deploying funds to make profit. Taking in to account the unknown lock down period for Covid 19 and costs to re-start, we are recommending looking at a plan which gives your business at least 12 months of liquidity for costs retained.
Defer tax though HM GOV schemes.
Access suitable Grants.
Review all staff and maintain as any staff as possible, but if needed, Furlough staff.
Then access CBIL or equivalent DBW Loan schemes.
Re-plot your cash flow projection and understand your next 12 months.
Move quickly onto Stage 2
Stage 2: Revive Strategy (Apr-Jun 20)
Plan for your start up, by working through April to June on all aspects of your business.
Full review of all your other costs in the business.
Look at your supply chain for potential to make changes both to suppliers for costs, delivery and reducing risk by over exposure to one supplier with an extended supply chain logistics. This will allow you to see how exposed your company is for all its parts to both one company and any country risks for future lock down’s. Perhaps look closer to home for suppliers if cost allows, think British perhaps to guarantee delivery slots?
Stock level review, how much and key parts etc.
Client review, who are they, have they deferred orders, future orders and their financial strength to pay on time?
Full review of possible re-structure of your loans, asset finance and cash flow facilities.
Again re-plot your cash flow projection to understand your next 12 months.
Stage 3: Thrive (Jul- Dec 20)
Plan for Growth in 2021.
As you will be looking to the future, then the actions taken in Stage 1 and 2 will have robustly tested the business costs and the way it has traditionally done business and also should have created a culture where you may be able to look for a new and broader spread of clients and a less concentrated supply chain.
Both these actions will help your business reduce risk from hopefully increased sales and reduced % exposure to any one client and a broader supply chain.
This half year period can be focused on new sales and enhancing service to clients, so in brief consider
New orders/Sales
Supply chain concentration
Staffing
Deferred HMRC Revenue cash flow hits in 2021.
Each stage needs to have targets, time-frames and be exact in execution.
We always use both our internal and external advisers with specialist sector and technical knowledge to assist our client’s management teams to navigate these questions.
Above all, stick to the plan and have faith in the quality of your business.
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