Business recovery: Now is the time to seek counsel
As businesses battle the impact of COVID-19, it’s important to adopt appropriate measures now, for tomorrow
In 2010, following Ireland’s financial crash of 2008/9, Neil Hughes, Managing Partner at Baker Tilly in Ireland, developed the Seven Cs of Business Recovery framework. His goal: to help Irish business owners realise that despite the bleak economic forecast at the time, there was a straightforward way of navigating the obstacles presented.
Fast forward a decade, and the topics discussed ten years ago have become relevant again as businesses all around the globe face exceptional challenges as they grapple with the fallout of the ongoing COVID-19 crisis. Governments worldwide are trying to find ways to keep their economies moving by initiating tax relief and stimulus packages.
“The pandemic has rapidly transformed our economic and employment landscape and our traditional economic outlook is simply no longer viable”, explains Hughes.
“However, I believe the principles set out in the Seven Cs can help position businesses on the road to recovery. The Seven Cs of Business Recovery start with taking advice to establish where your business is now, how certain challenges have impacted your business, and most importantly taking Counsel about where your business is going.”
This is a view echoed by Malaysia’s Global Business Solutions Director, Loke Chee Kien. He believes Chief Financial Officers (CFOs), together with their C-Suite, should adopt transformative mindsets subsequent to the pandemic.
“Businesses will need to review their business plans and reallocate their resources to optimise future returns after surviving COVID-19.”
Prior to the pandemic, the CFO’s goal was generally focused around financial growth. Now, CFOs are tasked with answering the million-dollar question: how long will the business be able to survive?
“For a business to emerge from this crisis, the CFO plays a crucial role in ensuring the continuity and sustainability of the business,” Chee Kien says.
“In the immediate term, CFOs will have to review the business’ cash flow position as well as devise a survival action plan for the business for at least six months.”
“Now more than ever we are overwhelmed with market drivers – mixed, mostly negative,” explains Ryan Piper, Director of Strategy for the Baker Tilly network.
“The medium- and longer-term views are hazy and at times contradictory. However, now is the time to start planning for the recovery that will come; doing this will help to shape those immediate crisis situations and set you up for the future.
“Scenario planning is not about predicting the future, it is about preparing for different outcomes.”
“COVID-19 has shown us that we can innovate and make decisions quickly to adapt as needed to succeed, explains Matthew Socha, Partner, Assurance Services and Industry Leader, Not-for-Profits at Cherry Bekeart, LLP.
“We’ve seen colleges implement online learning programs in the course of two weeks, teachers reading books to their class via Facebook Live, and employees adapting their work hours, timing, and methods to respond to the changing needs of the organisation. This crisis reminds us that every day innovation is often more impactful than big structural or organisational changes.”
But as Hughes explains, leading your business through extreme challenges means taking advice from a select group of professionals who will help ensure the proper choices are made to deal with the current situation.
“Uncertainty and increasing pressures can make it difficult for business owners to identify the correct strategies, which is why taking counsel at an early stage is so important.”
Three advisors to seek guidance from
Typically bringing strong numerical and analytical skills to the table, your business projections for the post COVID-19 landscape will require insights from your accountant into statistics that measure the performance of your business.
An accountant will look at specific areas that need to be improved and will help you make difficult, but necessary decisions. More often than not, it is the advice of the accountant of the business that can lead to its survival.
Trained in reasoning and structured problem-solving, a lawyer can be of great benefit to your business in good times and in bad but especially when there are difficult conversations to be had with employees, landlords, creditors and other key stakeholders. There may be legal remedies available to you in relation to the issues you face that you are unaware of. It is important to take legal advice early and avoid taking a ‘do it yourself’ approach to researching the law.
Historically, this might have been your bank manager; now many businesses have alternative debt providers, equity players, angel investors etc. A major source of advice and often a voice of experience, your funder should be one of the first people that you touch base with; communicating your situation so that solutions can emerge which will keep the wheels of your business well lubricated. A lack of profitability can be temporary, but it is always a lack of cash that accelerates business failure.
“Uncertainty and increasing pressures can make it difficult for business owners to identify the correct strategies, which is why taking counsel at an early stage is so important.”Neil Hughes
The importance of being selective
“In most of the recovery cases I have been involved in, a common error of the business owner in crisis was not taking advice which could have ultimately led to the right decisions being made and the business protected or preserved”, explains Hughes.
“An even more dangerous phenomenon I have witnessed has been advice sought from too many ill-informed sources, or indeed from unqualified social media posts. Be selective in who you retain in your tight group of advisors; listen carefully to their counsel and then move swiftly to the next stage of your recovery plan.”
The article “Business Recovery: ‘Now is the Time to Seek Counsel'” was first published on www.bakertilly.ie on 9 April 2020. The article “I’m Mr Brightside: Looking for Opportunities in the Wake of COVID-19” was first published on www.cbh.com 23 March 2020. Both have been reproduced with approval of the authors.