COVID-19 - Business Continuity Planning (19 March 2020)

Cashflow management 

There are obviously going to be some businesses that will encounter significant cashflow difficulties. It’s too early to know details but we anticipate banks to offer flexibility.  This could include: 

• Repayment holidays,

• Changing loans to interest only, and 

• Overdraft facilities. 

Forecasting / scenario analysis 

Financial forecasting enables businesses to assess the financial impact of certain scenarios. This can help with key strategic decisions - for example, whether to continue trading or close the doors. temporarily  We are already seeing strong demand from clients for forecasting and scenario analysis.   

Deferring expenditure 

For some businesses, it may make sense to retrench and defer non-essential expenditure. Careful thought it required when considering which costs to cut, as short-term decisions could have long term implications. 

Internal Focus 

In some cases, it might be possible to utilise idle staff for internal business development activities that will add value to the business in the long term. For example, staff could help with developing key systems, preparing operations manuals, strategic planning, marketing, product development,  etc. There may also be opportunities to bring forward asset maintenance activities and to front end administrative work. By pro-actively engaging in these activities businesses can put themselves in a position to hit the ground running when demand picks up again.  

Innovation 

Depending on how events unfold, it might become impossible for some businesses to continue providing their normal products and/or services. However, there may be opportunities for businesses to innovate by utilising their institutional skills and knowledge to offer alternative products/services and/or to adapt their service delivery model. For example, gym instructors are offering virtual classes online, real estate businesses are utilising virtual reality technology to showcase properties and food businesses are moving towards takeaway and home delivery models.

Restructuring 

Sadly, employment restructuring will be inevitable for some businesses despite the government support.  We recommend planning ahead and seeking appropriate legal advice. 

Prepare for an eventual recovery 

It is important to remember that this situation is temporary. Some businesses may experience a demand surge when the economy beings to pick up again. We recommend businesses develop plan for remobilising operations in an efficient and effective manner. This will likely be a delicate balancing act and timing will be critical.