Adapt. Change. Survive.
The world is faced with incredibly uncertain and tragic times as a result of the Covid-19/Coronavirus pandemic. This will be a global tragedy as many people have already sadly died or lost their loved ones, and some people will very tragically continue to suffer as a result of this disease. In particular, the elderly and most vulnerable within our society are at risk and we need to ensure they’re protected.
Humanity in these times is connected with the same problem, and people around the globe need to work together calmly in order to protect ourselves as best we can.
We also need to manage the social effects of this disease and the disruption that it is causing.
For a lot of clients of our firm, who mostly comprise of small to medium businesses, another significant impact of this disease is the prospect that they are facing is a massive downturn in business. For some small and medium businesses the survival of their business is, uncertain at best.
We have had enquiries from clients of the firm seeking guidance and advice regarding these uncertain times with various issues relating to their businesses.
Our firm exists to help businesses and people with problems and disputes and to resolve these issues to impact people’s lives for the better. We consider that at the moment, giving business owners and individuals proactive advice in order to best protect their business regarding this pandemic is the best contribution that we can provide to our clients and our community at this time.
The impact that business owners can have by leading effectively to ensure that their businesses survive and thrive is huge, having regard to the number of Australians who are employed by small and medium businesses.
The purpose of this article is to set out basic principles, advice and guidance below that will assist people and businesses to take appropriate steps to avoid situations that will cause detriment to their businesses and their livelihoods. We exist because we wish to help people in difficult situations, and we genuinely hope this article assists people in taking steps to improve the positions of their businesses and their livelihood moving forward into the future.
Avoid Panic Paralysis
Panic paralysis – it is simple – don’t do it!
There is a lot of sensationalised information circulating in the media and market at the moment, which is predominantly found on social media platforms. If businesses or individuals wish to adopt a state of panic and get aboard the panic paralysis train, it will simply be a race to the bottom. No question about it.
In particular, the businesses who simply throw up their hands and shut the doors as a result of the state of panic or who are paralysed by the current events and fail or refuse to adapt, act and move will simply not survive. Businesses and their leaders who take that approach will simply awake from the paralysis in two months’ time in a cashflow hole that they simply can’t get out of. Insolvency will be certain – lives will be affected.
Leadership by company directors and business executives has never been more important to ensure that companies are being innovative and adapting to change in order to survive this crisis.
The circumstances of the business and commercial environment have changed. The circumstances and environment for every business will change in some way as a result of this crisis.
On 18 March 2020, Prime Minister Scott Morrison, announced that social distancing will be a reality for all Australians for not only the immediate short-term, but will be a reality for Australians for a number of months moving forward.
Businesses also need to be aware of other factors and changes to the commercial environment such as limitation on travel, social distancing, supply chains, logistics, people, demand, cash flow, discretionary spending, human movements and behaviours, and the list goes on.
All market factors that will impact upon revenue generation for your business must be considered.
Business owners and directors are required NOW to be conducting very specific due diligence in order to pivot to move with speed.
For all of those parties who simply go in to ‘panic paralysis’ or continue to do things the way that they always have will undoubtably run in to troubles.
Cashflow is key
Many businesses need to be fully aware of the fact that debtors of the business (people that owe your business money) are likely to be slow in paying or not want to pay. It is a reality that a lot of businesses will be seeking to preserve and maintain their own cashflow and will therefore try and push your businesses trading terms as a result. The short answer is that businesses cannot afford to allow other businesses or people to place your business into this position. You need to take all and any steps necessary to recover those debts and do so proactively and vigorously.
Businesses need to protect their cash position and immediately eliminate any unnecessary expenses from the business.
A weekly cashflow projection is required for management of the business. Revenue will be affected, and planning is essential to ensure it can meet business expenses.
Accordingly, completing a weekly cashflow projection with conservative revenue expectations will assist company directors and executives in making calculated management decisions based upon data and facts (and tight projections).
It is one thing to understand that the market and the way we do business is changing, but properly implementing a crisis management plan and effective execution of the plan is required to preserve the success and longevity of the business.
Execution is key in relation to any strategic plan of a business, and this is of even a greater importance in a crisis situation.
The plan may be to change the way that services are delivered. At our firm, we have full cloud-based technology that will allow our staff to work remotely where necessary. In addition, we have been required to be innovative in the way that we deliver our services by offering video link meetings with Zoom (an online video conferencing platform) to clients so that we can continue to service our client requirements while responsibly navigating the safety of our team and the government’s requirements for social distancing. These are some examples of the execution of change that have to occur in order for businesses to continue to deliver their products or services in order to continue to thrive.
We are forced to being innovative, and if there is any silver lining in this Coronaviris dark cloud, it is that businesses and their leaders are being forced to be innovative in order to survive.
Businesses also need to now carefully consider innovative and new ways to market their businesses in order to generate sales and revenue for their future survival. This may include making changes to the product or service delivery, or offering alternative products or services by way of diversification to meet market requirements.
If business owners take a well-considered and calm approach to the current situation, while moving and pivoting with speed then small to medium businesses can not only survive but thrive into the future.
The resilience that company directors, business owners and company executives have (in their inherent nature) will be called upon and no doubt that business leaders will meet the challenge. Not only will there be resilience from the leadership of businesses and companies but many hardworking team members in any organisations will also follow resilient leaders in order to ensure that the business survives and thrives.
For entrepreneurs and business owners, this resilience and entrepreneurial flair that made them successful in the first place will no doubt shine forward and ensure the success of many businesses in Australia, and therefore preserve the jobs of a countless number of Australians in the process.
We genuinely hope that all Australians work together in this crisis and not only preserve each other’s wellbeing from a health perspective but also from a social perspective so that we can all work cooperatively together as a society. We also need to work together in the business community so that we can continue to thrive into the future. Being aware and offering assistance and support to those in your local business community is paramount at this time.
If we all work together to support one another, and have a clear plan to Adapt and Change, we will all be sure to Survive & Thrive.
Need further help?
If you do require any further assistance whatsoever, we offer a FREE 45-minute consultation for business owner, directors, or individuals who require assistance. Our firm is fully set up for Zoom consultations by video link or by telephone and our team are available to assist any businesses or any individuals that require it.
Some of the areas of our expertise that are relevant to the current crisis are as follows:-
- Crisis Management (advice, planning, implementation);
- Safe Harbour advisory (laws to protect directors from personal liability);
- Debt Recovery & enforcement;
- Workplace and Human Resource matters;
- Commercial and Contract Disputes;
- Negotiation with creditors including the ATO;
- Turnround and Restructuring Advice; and
- Insolvency Advice and Options.
If you require any assistance in relation to the above, please do not hesitate to contact any of the Partners on the details below:
Shaun Rose – [email protected]
Billy Fitzgerald – [email protected]
Melissa Inglis – [email protected]