Business survival after Covid-19

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Business survival after Covid-19 needs a combination of restructuring, rebuilding and reinvestment

Having the right leadership team, external support and advice to guide your company through the coming year will be crucial to the survival and future growth of many companies. Where Now Consulting has a team of experienced professionals that can help from business strategy through to company turnaround, rescue and restructuring.

In just 12 weeks businesses have been through many phases requiring agility and rapid deployment of new approaches that would have required months if not years of planning before the pandemic.

Our work has moved from a focus on growth into new markets and sectors to supporting our clients to plan cashflows, obtain funding under the various government schemes, and to move to alternative homeworking arrangements or to furlough employees. We have observed three distinct phases:

Initial Lockdown

Characterised by a high level of uncertainty but required rapid action to safely mothball facilities and move staff to working from home.

Crisis Management

For most business leaders this was a busy phase implementing the various government schemes to support cashflows and reduce short term costs via the Job Retention Scheme (JRS) and in discussions with customers, suppliers and landlords.

The restart

The timing of this phase is more extended. Some companies, for example those in the hospitality sector, are still to approach this phase. Re-opening whilst creating safe environments for customers and employees has been the key concern.

The question now is, “What happens next?”

As leaders we have faced three months of rapid change to our businesses at a time of very low or no real commercial activity. We now face a period where the only certainty is uncertainty. The way we work and interact has changed, the world has moved into a global recession, travel is restricted, and many sectors are facing fundamental structural changes.

As business leaders it would be easy to be overwhelmed and to “freeze”, delaying decisions and hoping that all will revert to normal.

Having the right team with the correct mindset to drive towards future sustainable growth will be key. We are already hearing talk of restructuring and redundancies and, sadly, this will be necessary for the survival of many companies, but previous downturns have shown that companies that solely focus on cost cutting activities often underperform peers that take a more balanced approach, both during the downturn and in the subsequent recovery.

At Where Now Consulting we think of this based upon balancing the following elements:

Restructure

Tempting as it is to look at cost cutting on the basis of a target % cost or headcount reduction, an approach based upon driving operational efficiencies may be more effective to reduce overall costs whilst building an efficient structure for the future. Eliminating costly or loss-making activities and processes has the potential to ultimately create greater returns both in the shorter and longer term.

Rebuild

It is easy to lose sight of customers and market position when restructuring. Ensure that there is a continued focus on the customer, their needs and experience. Rebuild relationships with channel partners and look towards opportunities to move into new markets and opportunities. Investment in brand communication and promotion will need to be included in the mix.

Reinvest

The final element is re-investment. This could be in R&D, technology, sales channels, new products and plant and machinery, in support of existing and new markets. There will often be opportunities in a downturn to invest at a lower cost as prices are suppressed, creating opportunities for growth and operational efficiency both during the downturn and as business recovers.

With each element it is important to create balance, avoiding big bets or an over emphasis of one activity over another. Some of the most successful companies during previous downturns focussed on agility, rapidly responding and taking advantage of opportunities whilst retaining a balance across a portfolio of activities.

Finally, at a time when cashflow is tight it is difficult, but crucial, to balance short term cash flow actions with profitability and investment for the future.

If you would like to discuss anything relating to this article, or any of our services, you can contact us directly by email or phone, or simply “ask to chat to our team” via our website: www.wherenowconsulting.com

 

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About Where Now Consulting Ltd: Where Now Consulting is a management consulting company that focuses on helping its clients to grow and compete. The company offers a range of consulting services, including business turnaround and performance improvement, formulating market entry strategies, mergers and acquisitions, joint ventures and alliances, and sales and distribution strategy and management.

For more, please visit Our Services page.