COVID-19 has been a period of treading water for some organisations, while an opportunity to swim faster than ever for others. But the big question on leaders’ minds now is: What’s next?
In our audio series, Rethink Financials, Business Services National Leader Matt Laming and Head of Strategic Innovation Tanya Titman discussed different ways businesses can shore up their walls as we move into 2021. The discussion boiled a lot down to best practice - businesses that knew their numbers and their drivers, and had a good roadmap, were best-positioned to adapt quickly and make decisive moves to survive the pandemic.
So if best practice is key to not just surviving, but also thriving, then what specifically should leaders do now?
1. Consider operating lean
Operating a lean business is a great way to set yourself up for success. What we’ve seen through this phase is that people now understand the fat that was within their business, and have created a chance to cut some of those cost areas. They know they don’t have to turn over as much to deliver the same profit.
Take the opportunity to examine your business and ask: “Do I need that?” You will likely find that there are nice-to-haves and pet projects that could be cut for now whilst we get through the next 12 to 18 months.
2. Know your cash flow risks
One of the biggest risks to organisations coming up is the popping of the payment deferral bubble. Businesses across the country suffering severe downturn have deferred liabilities and loan repayments, but these will suddenly come to bear in that September to October period - when cash flow is going to be limited.
Know your forecasts. And not just how the coming months will impact you from the point of view of the business, but also how they may affect your customers. If you can start plotting out your forecasts now, it’s going to put you in a stronger position going into this next phase.
3. Capitalise on opportunities
Today we’re talking a lot about best practices, and one of those is having a good plan. In the next three to six months there will be opportunities in the market, and organisations must have a plan to take advantage of them.
That means being prepared. Will you need funding? What funding can you get? What will it do to turnover and operations? What will it do to people requirements and capacity? What is the flow-on of those costs? If you understand what you can and can’t do in the coming months, your business will be well-placed to take full advantage of the shifting marketplace.
4. Keep innovating
So many businesses have evolved in a digital sense during this period, which brings an interesting element to people’s business models moving forward. As you return to the office, do you go back to business as usual - the way things were before? Or do you move forward with all the new initiatives and efficiencies built in the last few months? How would you cater for that in terms of internal systems and processes?
Now is the time to really think about what the future looks like. Preparation around funding, modelling and cash flow forecasting are critical, as well as outlining all of this to your staff. After all, it’s they who will have to embrace these new initiatives.
If you need help to Rethink your future business plans, our BDO experts are available to help you define ‘what’s next’.