20 Oct 2020 | 09.49 am
The Seven Cs Of Business Recovery
Neil Hughes of Baker Tilly Ireland sets out a roadmap for business recovery
20 Oct 2020 | 09.49 am
Ten years ago, Neil Hughes, Managing Partner at Baker Tilly Ireland, set out a road map for business recovery. His insights remain more pertinent than ever.
The fallout from the pandemic has undeniably had a radical impact on the economic and business landscape. As the multifaceted nature of the coronavirus crisis continues to present extreme challenges, how can business owners and managers implement innovative and practical strategies to ensure their businesses get back on track?
The important thing to avoid here is mismanagement. Failure to take the correct advice often sets in motion a chain of trends that lead to deterioration of the business.
The Seven Cs aims to provide a practical framework for those who are working hard to position their business on the road to recovery.
Seeking counsel at an early stage is the first step to pivoting your business during a crisis.
Businesses in distress should avoid taking unqualified advice, and instead seek guidance from a select group of professionals. Work with your accountant, solicitor and funder to formulate a practical and comprehensive recovery plan.
Be honest and transparent with the people and groups to whom you are indebted to – the taxman, lenders, landlords and suppliers. Your creditors need to know what financial position you’re in. This, in turn, is likely to generate goodwill. Your honesty will be appreciated, your integrity maintained. Start with the truth, then go from there.
Your staff play a key role in building business recovery. Communicate with them clearly, and frequently. Be forthright about the condition of your business; they will respect you for it and are likely to show loyalty in return. Failure to secure their cooperation will significantly dilute your business’s chance of survival.
4) Clarity of Purpose
Create a new business plan which will provide greater clarity on all functions of your business.
Adopt an entrepreneurial attitude. While there is no doubt that this crisis has presented grave difficulties, it also provides plenty of scope for innovation. There are opportunities to be found if you look hard enough.
As many business leaders find themselves implementing cost cutting measures, it’s important not to make arbitrary or general cuts that may adversely impact long-term goals.
The main areas for potential savings in any business lie in eliminating waste, seeking out and demanding the best prices for supplies and services, and carrying out certain tasks in-house that previously were contracted out to other companies.
A swift recovery often boils down to one thing: cash flow. Cash control means releasing the ‘lockup’ of your business i.e. the latent profit that is locked up in your stock, work-in-progress and debtors. Remember, even profitable businesses will fail if they run out of cash.
Consistently deliver excellent customer service.
Engage with them, ensuring you are adapting to their changing needs. It is important that the customer’s experience of a product or service is as pleasant, straightforward, and satisfying as possible.
• Visit bakertilly.ie
Photo: Neil Hughes FCA is Managing Partner at Baker Tilly Ireland and author of ‘Beating the Recession: The Seven Cs of Business Recovery’, published by Chartered Accountants Ireland, and on sale now.